MP's add €4 billion to 2024 budget; Funded by extra tax on companies, banks, wealth
Dutch parliamentarians added a total of 4 billion euros in plans to the national budget for 2024 during the general budget debate on Wednesday and Thursday. The plans are mainly aimed at protecting the purchasing power of low- and mid-income households. The MPs want to lay the bill for these plans mainly at the feet of banks, businesses, and wealthy investors, Financieele Dagblad reports.
The parliamentarians’ plans to protect purchasing power include a 1.7 percent increase in minimum wage next year that will cost 2 billion euros, pushing 420 million euros into keeping public transport fares affordable, scrapping the government’s plan to increase excise duties on petrol and diesel again in January, and pushing 200 million euros into lowering energy taxes for households.
The MPs want to pay for these plans by increasing the tax in boxes 2 (higher incomes) and 3 (wealth and assets) by 2 percent, increasing the bank tax, and taxing the purchase of own shares. Money can also come from “additional items” in the Ministry of Finance’s budget, additional revenues from natural gas revenues, and “if necessary” from the National Growth Fund, intended to boost economic growth in the longer term.
The suggested tax increases led to frustration in the business community. Employers organization VNO-NCW called the tax increases “life-threatening for SME entrepreneurs, listed companies, and our banks.” The Dutch Banking Association said that the Tweede Kamer, the lower house of the Dutch parliament, was “playing with fire.” And the Association of Securities Owners called the plan to tax share buybacks “absurd.”
The plans aren’t set in stone yet. The Eerste Kamer, the Dutch Senate, must still approve them, and majority support is far from guaranteed. According to FD, many of the plans lack detailed elaboration, and the financing is shaky.