Bills Will not Be Banned Skip to content

Bills Will not Be Banned

Initial responses to a proposal to take the 5,000 and 10,000 króna bills out of circulation to counter tax evasion show that society is not yet ready for such a radical idea, according to Iceland’s Minister of Finance Benedikt Jóhannesson, reports RÚV.

Reducing the use of cash was one proposal contained in a report released yesterday by a finance ministry committee that Benedikt had appointed to examine the ‘black economy’ and bring tax evasion to light.

News website Kjarninn stated in an article today that the proposal had been strongly criticized, both by the government and opposition. Among those who criticized the proposal are Independence Party members Teitur Björn Einarsson and Brynjar Níelsson, a number of Pirate Party MPs and Lilja Alfreðsdóttir, deputy chairperson of the Progressive Party.

Given the criticism, Benedikt subsequently wrote on his Reform Party’s website that the concept of limiting the use of cash outlined in the report was “fortunately not a fundamental point in the group’s proposals.”

Benedikt pointed out that they were not talking about banning cash. He wrote that average calculations show that the average Icelander has almost 200,000 krónur in cash, of which half is in 10,000 króna bills. “Because few people admit to having such an amount in cash, it gives rise to the suspicion that ready cash is the oxygen of the black economy. The proposals in the report on reducing cash (but not banning its use) are made in order to reduce the black economy and put pressure on those who work [in that economy], and not to burden honest people,” he wrote.

“The committee’s proposals are not intended to benefit credit card companies,” added Benedikt.

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