Poland backtracks on plans to limit cash payments

Poland is set to scrap planned measures that would have placed limits on the maximum size of cash transactions. The decision comes after a junior partner in the ruling coalition criticised the restrictions as an infringement of Poles’ freedoms at the behest of “eurocrats” and the “banking lobby”.

Under measures introduced as part of the government’s flagship “Polish Deal” tax reform programme, from 1 January 2024 cash payments between businesses are supposed to be limited to 8,000 zloty (€1,800) and payments by consumers to businesses to 20,000 zloty (€4,500).

However, in April this year, Sovereign Poland (SP), a hard-right junior partner in Poland’s national-conservative ruling coalition, submitted legislation to remove those planned limits.

“For the sake of freedom, security and cultural identity, we propose to maintain the current status quo,” said the party’s Marcin Warhoł, who serves as deputy justice minister. Currently, business-to-business cash transactions are limited to 15,000 zloty and there is no limit on cash payments by consumers.

Warchoł cited central bank research indicating that over 18% of adults in Poland do not have electronic payment cards, a figure that rises to 48% among those aged over 65. “Restrictions on cash means social exclusion, financial exclusion,” he argued.

The head of the central bank, Adam Glapiński, is also an opponent of restricting cash payments. In 2021, he appealed to the government to ensure that consumers have a legally guaranteed right to pay by cash.

On Friday, SP’s legislation was overwhelmingly approved by the Sejm, the lower house of parliament, with 438 votes in favour and only eight against. The bill was unanimously supported by every party apart from The Left (Lewica), eight of whose MPs were opposed with 32 in favour.

“We managed to defend the freedom of Poles to have cash,” celebrated Zbigniew Ziobro, Sovereign Poland’s leader, who serves as justice minister and prosecutor general, quoted by broadcaster TVP.

“There was an attempt by the banking lobby, but also by eurocrats – Klaus Schwab [the founder of the World Economic Forum] and other pseudo-visionaries – to [make] cash disappear and be replaced by electronic money,” continued Ziobro.

“That would be very bad news for the freedom of Poles, who should always have the right to choose,” he continued. “If someone wants to use electronic money, no one forbids it, but if someone does not want to, they should have the right to use cash, which is a kind of symbol of sovereignty.”

The legislation now passes to the upper-house Senate, where the opposition has a majority but which does not have the power to overrule the Sejm. Once passed by parliament, it is sent for approval or rejection by President Andrzej Duda, a government ally.

Restrictions on cash payments are seen as a way of limiting the size of the “grey economy” – meaning business transactions that are not reported to the authorities and remain untaxed.

The UN Global Compact Network Poland estimates that in 2022 the size of the country’s grey economy rose to 20.65% of national GDP, up from 13.55% in 2019.

Main image credit: Narodowy Bank Polski/Flickr (under CC BY-ND 2.0)

Daniel Tilles

Daniel Tilles is editor-in-chief of Notes from Poland. He has written on Polish affairs for a wide range of publications, including Foreign Policy, POLITICO Europe, EUobserver and Dziennik Gazeta Prawna.