Fabio Frustaci / EPA
Giorgia Meloni, Prime Minister of Italy
The proposal aims to increase the ceiling on cash payments to 10 thousand euros and is being criticized for risking facilitating money laundering and tax evasion.
The Italian government is being criticized due to a proposed change to the budget law that would double the limit for cash payments in the country. The measure is rekindling an old debate about consumer freedom, tax evasion and the size of the informal economy.
An amendment to the 2026 Budget Law, presented by Prime Minister Giorgia Meloni’s Brothers of Italy party, seeks to raise the limit for cash transactions from the current 5000 to 10,000 euros for individuals and companies. The proposal follows a previous decision by Meloni’s government to increase the limit from 2000 to 5000 euros in 2022, a measure that came into force in January 2023, recalls .
Proponents of the change argue that higher limits on cash payments do not automatically translate into more tax evasion. Deputy Prime Minister Matteo Salvini, leader of the League party, presented the proposal as a matter of individual freedom. “We are not in Venezuela”, said Salvini, defending what he called “consumer freedom”.
Critics, however, warn that the move risks undermining efforts to contain Italy’s large informal economy. Opposition parties, including the Democratic Party (PD) and the Green and Left Alliance (AVS), argue that raising the limit could facilitate tax evasion and weaken transparency. The leader of the PD in the Senate, Francesco Boccia, described the proposal as a political maneuver to garner support, while the co-spokesperson of Europa Verde, Angelo Bonelli, stated that it would “open new spaces for the underground economy”.
The concerns are supported by economic data. According to the Italian National Statistics Institute (ISTAT), the country’s informal economy and illegal activities generated 217.5 billion euros in 2023, which corresponds to around 10,2% do PIB and an increase of 7.5% compared to the previous year. Sectors such as construction, textiles and food are widely considered to be hotbeds of cash tax evasion.
The amendment includes a mitigating measure: a €500 stamp duty on cash payments between €5,000 and €10,000, along with the obligation to issue an invoice. Critics argue that these safeguards can be easily circumvented by informal agreements between buyers and sellers.
Although the government points to data showing a drop in tax evasion between 2018 and 2022, institutions such as the Bank of Italy have already warned that limits on cash payments, although not infallible, act as a barrier against certain forms of crime and evasion. Studies have also shown that electronic payments, which are traceable, tend to reduce undeclared transactions.
At European level, EU institutions adopted new rules to combat money laundering in 2024, establishing a maximum limit of 10,000 euros for cash payments across the bloc. However, the regulation allows Member States impose lower national limits and will only come into full force in 2027.
