The end of the year may also mark the end of the infamous ‘buffelboete’. The government is expected to approve new tax plans in the coming weeks, which could result in lower incomes receiving up to €230 extra per year.
Controversy over the ‘buffelboete’ #
In a few weeks, the new year will begin, potentially with new tax rules that will benefit Dutch workers earning the minimum wage. The plans are a response to the proposals announced on Prinsjesdag, which would have disadvantaged lower incomes.
Labor unions have dubbed the tax increase the ‘buffelboete’. Hard-working Dutch people are effectively paying a penalty due to changes in tax and labor credits, which would have cost employees hundreds of euros per month.
Previously, we reported on the ‘buffelboete’ and the plans of the caretaker cabinet. Now, it is expected that both the Senate and the House of Representatives will approve the plans in the coming weeks, with the changes taking effect from January 1.
What you can expect to gain #
The caretaker cabinet has a proposal ready that will increase the net incomes of Dutch people with lower incomes. Employees will receive more labor credits, and especially people with full-time jobs can benefit greatly.
Dutch people with a 40-hour work week and a net salary of €2,311.16, the minimum wage, will gain nearly €230 per year if both houses approve the plans. This is a significant improvement, as the Prinsjesdag plans would have cost this group money.
Dutch people with a 20-hour work week will gain about €164 per year. A 36-hour work week will yield €153 more per year under the proposed plans.
Higher incomes still benefit #
The reason not everyone immediately objected to the tax plans announced on Prinsjesdag is that the average Dutch person would benefit. However, this average is pulled up by a relatively large group of higher incomes, while many Dutch people earn considerably less than this average.
With the new proposal, Dutch people with an income of €900 to €2,000 are no longer disadvantaged. The average and relatively wealthy Dutch person also does not have to give up much. People earning twice the modal income will gain €446 next year, instead of €577 under the original Prinsjesdag plans.