Fast payment with a coffee card or purchases in Slovakia? Could be the past. In our confederate neighbours there is simply a silent revolution that takes the country back years in digital development. All thanks to a fresh taxation on financial transactions, which, although formally charged to entrepreneurs, in practice strikes consecutive into client portfolios. The effect is immediate and surprising: the shops massively charge fees for card payment, offer discounts for cash, and any premises completely quit terminals. Poles planning to go to Slovakia must prepare for considerable difficulties and have a supply of cash with them. What is happening beyond our confederate border is being watched closely throughout Europe.
A fresh taxation that reverses the digital revolution. What is it?
The Slovak government, looking for additional sources of income, reached for a solution inspired by Hungary – introduced a peculiar taxation on financial transactions. The nonsubjective is an ambitious fiscal consolidation plan. The fresh tribute is to bring to the state budget EUR 500 million This year, and in the next year, this amount is to emergence to awesome EUR 700 million. The mechanics is simple: it is banks and payment institutions that pay the tax, but its burden is immediately shifted further.
In practice, this means that the costs are borne first by entrepreneurs and yet by customers. The owners of shops, restaurants or service points, in order to avoid losses, began utilizing different methods to compensate for fresh burdens. Slovakia, which until late was 1 of the leaders of close-up payments in the region, is becoming an experimental ground for de-digitisation. Experts inform that this is simply a dangerous experimentation that can have far-reaching consequences for the full economy, not just for Slovakia.
Card payment is simply a standard. How does that work?
The consequences of the fresh law can be seen at all turn. Slovak entrepreneurs do not intend to contribute to business and openly inform that tax costs will be borne by customers. The most popular solution was to charge an additional fee for each non-cash transaction. According to the Euractiv portal, in 1 of the veterinary clinics the supplement is even one euro per card payment, regardless of the amount of the account. This effectively discourages the extraction of the plastic from the wallet.
Other companies went 1 step further. More and more you can meet the offer special discounts for people paying cash. This is simply a clear signal for customers: cash is cheaper and more desirable. The utmost but increasingly common phenomenon is the full cancellation of payment terminals. The owners explain this by “technical failures” or simply study that they accept only banknotes and coins. For many companies, returning to cash has besides become a form of silent protest against government policy.
"The Stupidest taxation in History". Experts and politicians are on alert.
The fresh regulations have sparked a wave of criticism from opposition and economical analysts. Michal Šimečka, leader of the Progressive Slovakia Party, called the fresh tribute straight "the dumbest taxation in the past of the country". In his opinion, it will not only hit citizens but besides the competitiveness of the full Slovak economy. Critics indicate that Slovakia already belongs to countries with 1 the highest levels of fiscal burden in the European Union and the fresh fee will only make the situation worse.
Experts inform against a cascade of negative effects. Firstly, additional charges can drive inflation as companies will include them in the price of goods and services. Secondly, withdrawal in the digitalisation of payments may Scare off abroad investors and weaken Slovakia's position in the Single European Market. A larger amount of cash in circulation is besides a greater hazard of developing the shadow economy, higher operating costs for banks and little transparency of financial transactions.
Poles at gunpoint? Obstacles for tourists and border trade
Slovakia's change is not just an interior problem. They have a direct and very applicable impact on Poles – both tourists and entrepreneurs. People traveling to our confederate neighbors may be unwelcomely amazed erstwhile they see a higher amount on the terminal or hear that a non-cash payment is impossible erstwhile they effort to pay a card. The request to carry more cash becomes a fresh reality.
They'll feel it very badly. smaller companies located in the border area, which so far competed, among others, thanks to the ease of accepting payments from customers from Poland, the Czech Republic or Austria. Now they may lose customers who are accustomed to the convenience of digital payments, will not be prepared to return to the era of cash. The Slovak experimentation shows how 1 political decision can break down the years of habits and hinder cross-border trade.
Will Poland go the same way? Slovak experimentation under the microscope
At this point, the Polish government does not announce the introduction of a akin tax. However, the situation in Slovakia is closely monitored by another European Union countries, which besides face budgetary problems. If the Slovak experimentation proves to be fiscally effective – i.e. it will make the assumed gross without massive political losses to the rulers – It cannot be excluded that akin ideas will besides appear in another capitals, including in Warsaw.
This phenomenon fits into the wider global trend of the cash Renaissance. In the face of geopolitical tensions and rising cyber threats, central banks in Sweden or the Netherlands have already called on citizens to keep a cash reserve at home “for a rainy hour”. The Slovak case, however, is something different – it is simply a conscious, administrative decision that forces society back to analogue transactions. Its long-term effects will be a key lesson for Europe as a whole.
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No more paying your neighbors a card. The government introduced a new, absurd tax
