Doubts about support for business

A tax rebate of EUR 2 billion for businesses that the government wants to introduce next year raises questions in political The Hague. The opposition does not like the sweetener for businesses, and the ministries and the coalition also have doubts about the feasibility of the measure.

It concerns the so-called Banger Related Investment Discount (BIK). The government wants to introduce this next year, as a compensation for not reducing the profit tax for companies. It concerns an amount of EUR 2 billion in 2021 and 2022. However, the measure has not yet been worked out.

Reduction of wage tax for employees

The Cabinet reports that it is about ‘encouraging companies to make investments. In the ‘Prinsjesdag-stukken’ it is only stated about the measure: ‘Employers can temporarily receive a discount on the wage tax they pay for their employees when they invest in BIK-qualifying company assets’

Insufficient, according to a large part of the opposition in the House of Representatives. GL, SP and PvdA demanded the documents from the BIK at the beginning of the General Political Considerations on Wednesday morning. But they will not arrive until 5 October, said Rutte. Left-wing parties are already planning to postpone the discussion of the Tax Plan, to which the measure belongs.

But there are also doubts about the BIK from the ministries involved. The feasibility could become a problem. The Rijksdienst voor Ondernemend Nederland has to implement the BIK, but sources fear that it will be overloaded. Doubts about the implementation of the BIK also exist within the coalition

The plan has been on the table since the summer and comes straight from the tube of employers‘ organisation VNO-NCW. At that time, it was decided to abolish the planned reduction in corporate profits tax from 25 to 21.7%.

Rutte says on Thursday that the BIK is needed to support the economy. There is a great risk that investments will fall because of the corona crisis,’ says the Prime Minister. According to him, the tax cut should help to keep investments going and thus create jobs. But Rutte cannot answer the question of how many jobs the BIK would create. He does not think it is possible to estimate that with a tax measure.