“The project has now been submitted to the Seimas, comments have been received for it. We will take them into account as much as possible, negotiations are underway with the Ministry of Finance, the Government’s conclusion on these projects should come out in the fall and then, hopefully, the discussion in the Seimas will begin in the fall,” A. Kuniyoshi told reporters on Wednesday.
“Our lawyers were of the opinion that there should be no need to multiply existing legal acts and add provisions to those already in force. The Law Department of the Seimas has a different opinion, it is the result and how to achieve it that is important to us. (…) Accordingly, we are working, preparing a separate draft law, the draft law on the introduction of the euro would no longer be completed. Then the discussion in the Seimas would begin, when the conclusion is received”, she emphasized.
70 percent 1 and 2 euro cent coins scattered
A. Kuniyoshi emphasized that 70% 1 and 2 euro cent coins are thrown out and do not return to LB, and the bank still needs to mint money. According to her, this is unsustainable, and the residents themselves admit that 1 and 2 cent coins are not convenient for them.
“Cash department colleagues see the amount of coins in circulation, and 1 and 2 euro cent coins are not returned, 70 percent. thrown away, 30 percent comes back, which means you have to mint, re-circulate and they become disposable money. This is absolutely unsustainable, especially at the present time, when raw materials are becoming more expensive, and when we want to live fiscally and sustainably,” said the deputy chairman of the LB board.
“We see that people still like to use cash, but when you survey and ask if cash is convenient, 1s and 2s are the coins that are not convenient to use. This also shows how the coins do not return to the Bank of Lithuania, they are thrown somewhere, kept at home, in piggy banks,” she assured.
1 and 2 cent coins for cash payments have been abandoned in 6 euro area countries
Currently, the LB representative noted, there are six euro zone countries that have already adopted this type of internal legislation – Ireland, Belgium, Italy, the Netherlands, Finland and Slovakia.
“We are in the euro zone, we see what other countries are doing, six euro zone countries have already adopted their internal legislation to reduce the circulation of 1 and 2 euro cents in circulation through the rounding of the final amount of the shopping basket,” explained A. Kuniyoshi.
“Once the law is passed, the Bank of Lithuania would no longer need to mint coins, because otherwise we cannot decide not to mint 1 and 2 euro cents anymore, there must be a legal act,” she said.
1 and 2 cents should not remain in circulation until the end of 2028
The Bank of Lithuania (LB) claims that after the adoption of the law on the abandonment of 1 and 2 euro cent coins for cash payments, they should not remain in circulation within 2-3 years. Currently, the proposed start of rounding is 2025. May 1st
According to Edita Lisinskaitė, the chief specialist of the Policy, Issuance and Control Department of the LB Cash Department, the experience of other countries shows that the return of coins to the country’s central bank is the highest in the first and second years after the adoption of the law.
“Two to three years (it will take until 1 and 2 cent coins are no longer in circulation – ELTA). As the experience of other countries shows, the return to the central bank is the highest in the first to second year. Then, naturally, people are brought to pay or brought to central, commercial banks to exchange for coins of another denomination. That’s what they use their money for, it’s about 2-3 years”, E. Lisinskaitė told reporters on Wednesday.
She also mentioned that Belgium in 2014 introduced a voluntary option for traders to round 1 and 2 euro cent coins, but this did not work out in 2019 either. a legal act was passed, thanks to which rounding is mandatory.
“Belgians in 2014 introduced voluntary rounding, merchants could choose whether the trading company wants to apply rounding in all its networks or not. But then he saw that there is no appetite, no one applies and the goal is not reached in 2019 either. there was an amendment to the legal act, and that rounding has already become mandatory,” said the LB specialist.
“We immediately propose a mandatory one, because the examples of other states show that when it is voluntary, the goal is not achieved,” she noted.
At the beginning of July, the Seimas approved the draft law after submission, which aims to abandon 1 and 2 euro cent coins when paying in cash.
A final calculated amount ending in 1 or 2 euro ct is expected to be rounded down to 0, and an amount ending in 3 or 4 euro ct is expected to be rounded up to 5. Whereas an amount ending in 6 or 7 euro ct would be rounded down to 5 and the final calculated amount ending in 8 or 9 euro ct would be rounded up to 10.
It is argued that rounding would not apply to online commerce; for settlements between natural persons and between legal persons; when paying through intermediaries; performing tax obligations of the state; when paying salaries and other benefits related to labor relations; for state payments to residents or businesses; paying with money accumulated on discount cards, various coupons, checks.
After rounding is introduced, 1 and 2 euro ct coins would remain a legal means of payment, i.e. they will continue to be able to be used for payment at trading points or exchanged for coins or banknotes of a larger denomination at the cash desks of the Bank of Lithuania or branches of commercial banks.
It is proposed to combine the start of the application of rounding with the deadlines for the introduction of smart cash registers and set 2025 accordingly. on May 1, when all cash registers will be adapted to the new smart requirements.
It is claimed that if the bills are approved, there will be no need to return the 1 and 2 euro ct coins, so they will no longer need to be minted and put into circulation. As a result, according to an expert assessment, in the long term, about 3.7 million could be saved annually. The cash cycle of residents, business and state funds, and euros will be more sustainable and efficient.
2023-09-06 08:12:35
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