Despite the European Central Bank stating the proposed new cash limit law in Portugal is a very silly idea, the President of the Republic has signed off the legislation that limits cash payments to a maximum of €3,000.
President Marcelo Rebelo de Sousa gave the green light to the new rules that aim to help the tax office clamp down on the use of cash in both our business and private lives.
The change takes place by adding an article to the General Tax Law and prohibits "paying or receiving cash in transactions of any amount over €3,000." In order to avoid the splitting of payments into tranches of under €3,000 each, the law is ahead of you there too.
The Socialist Party MP, João Paulo Correia, said "the prohibition applies to all types of business, commercial or financial, including loans between individuals."
The draft law provides for some exceptions as foreigners are able to make payments of up to €10,000 in cash as long as they are not traders or businessmen.
Strangely, cash payments to the tax man are limited to €500 and anyone caught out paying cash for goods and services will be fined between €180 and €4,500.
The European Central Bank considers that a limit of €3,000 is disproportionately low, especially when the European rules on money laundering ignore transactions of below €10,000.
The new law is a result of the Left Bloc using its leverage with the Socialists, forcing through one of its own pet projects just to show its Bloquista followers that it has some power over the prime minister.
The law will be in effect in a couple of weeks and will have zero affect on the drugs trade, which deals in wodges of cash, the private second-hand car market and other illicit and illegal activities.
See also: 'Cash payments limit' - law stays at €3,000 despite ECB criticism' July 19th, 2017
