The four coalition parties are jointly submitting a proposal with which they want to ensure that a larger part of the controversial tax rebate of 4 billion euros ends up with small and medium-sized enterprises (SMEs). For example, they want to make more parties interested in the Job-related Investment Discount (BIK).
Most opposition parties do not see the investment discount. They think it is a “gift for multinationals”, or the abolition of dividend tax in a new guise. They also lack substantiation that the discount, which will cost a total of 4 billion euros in the coming year and the following year, will also lead to more employment.
To ensure that about 65 percent of the discount reaches SMEs, the coalition parties VVD, CDA, D66 and ChristenUnie are shifting the two rates. Investments of 20,000 to 5 million euros will receive a discount of 3.9 percent, instead of 3 percent as in the plan of State Secretary Hans Vijlbrief. Companies that make investments above 5 million do not receive a 2.44 percent discount on this, but 1.8 percent.
The SGP had previously argued for a larger part of the budget to go to smaller companies, but Vijlbrief said it did not see much of that at the time. “This cabinet has nothing against large investment projects,” said the minister. “They could be better for the economy than a lot of little ones.”
Doubts about the effectiveness of the discount
The BIK replaces further lowering of the profit tax and must prevent private investments from drying up, but the Central Planning Bureau and the Council of State, among others, are questioning the effectiveness of the discount.
VVD MP Helma Lodders said on Tuesday during the debate about next year’s tax plans that she hopes that the coalition proposal will be seen as a “helping hand” to other MPs. “And that we can all quickly get entrepreneurs, small but also large, to invest in the future of the Netherlands and the recovery of the economy.” The VVD is strongly in favor of the investment discount.
Despite opposition from left-wing parties and the PVV, the controversial plan can probably count on support in both the House of Representatives and the Senate, where the coalition parties only hold 32 of the 75 seats. Forum for Democracy (good for ten seats in the senate) said he was positive about the plan and leader Henk Otten of GO (two seats) said to One today that he is also in favor of the BIK.
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