Australian Government Set to Ban Cash Transactions Over $10,000, an Opening for Cryptocurrencies
The Australian government is looking to curb money laundering practices by introducing cash payment limits. In the May 8, 2018, federal budget unveiling, authorities made clear their intentions to tackle this menace by making it illegal to carry out cash payments exceeding $10,000. The new cash limit could also encourage the use of cryptocurrencies in the country.
$50 Billion of Black Money
Treasurer of Australia Scott Morrison is championing the cause and has made it clear that the Black Economy Taskforce will be strengthened with “mobile strike teams” to promptly fish out businesses that encourage corrupt practices by taking cash in hand, as well as people making deceitful cash transactions.
Authorities will also introduce a hotline to give a channel of communication to people looking to report those engaging in unlawful practices in their vicinity. The authorities reiterated that the measure would significantly limit the incidence of tax avoidance.
As per the news.com.au, “cash payments make it easier to under-report income and avoid tax obligations. It allows businesses transacting in cash to undercut competitors and gain a competitive advantage.”
The report also added that there had been many cases of “large undocumented cash payments being made for houses, cars, yachts, crops, and commodities.” All these make up the $50 billion black economy that has been stifling the growth of legit and honest businesses.
The Australian Taxation Office will also beef up its operations by carrying out highly accurate audits and upgrade its data analytics systems to reduce money laundering and criminal activities to the bare minimum.
War Against Sneaky Cash Payments
With effect from July 1, 2019, the government would start enforcing the ban of cash payments above $10,000 paid to businesses for the purchase of goods and services.
Commenting on the latest development, during his budget speech, Morrison said that “This will be bad news for criminal gangs, terrorists and those who are trying to cheat on their tax or get a discount for letting someone else cheat on their tax.”
“It’s not clever. It’s not OK. It’s a crime.”
Under this measure, people who need to pay above the stipulated amount would need to make use of alternative payment methods including electronic transfers and cheque. However, this new guideline does not apply to transactions between individuals or sending payments to financial institutions. Taskforce chair Michael Andrew also stated:
“There is a strong sense of community outrage at the inequality and unfair disadvantage created by the black economy. I hope that by creating an efficient, level playing field we can lower taxes, treat all businesses and workers fairly, increase community services or reduce debt if all Australians operate within the rules.”
Since the rise of cryptocurrencies last year, critics have lambasted digital currencies for its use in illegal trade and money laundering. Likes of billionaire Bill Gates have also pointed cryptocurrencies use for money laundering. However, as a fact, money laundering is more prevalent with fiat money. The monitored use of cryptocurrencies can curb money laundering issues far better than limiting cash payments.
It’s a good thing that the government is encouraging the transition to a cashless society. A digital economy will indeed be of immense benefit to all stakeholders.
Could the new cash payment limit encourage the use of cryptocurrencies for payments above $10,000? Share your views in the comments section.