According to insiders, that is the outcome of the coalition’s final budget meeting in the night from Tuesday to Wednesday. In order to cope with the blisteringly high inflation, the cabinet will allocate several billions next year for tax cuts. This concerns, among other things, the package that has already been earmarked for almost 7 billion euros this year, including lower taxes on energy and a reduction in excise duties on fuel.
Not all of those measures will be adopted again, because there was a lot of criticism about the lack of focus of the measures: the money would also end up with people who did not need it. That is why there will be a line on the VAT reduction for energy that applies for this year, in return the energy tax will be significantly reduced.
In order to focus support on lower and middle incomes, the health care and housing allowance will be increased. And with a view to families with financial concerns, the child budget will increase considerably. These are measures from 1 January, extra support for the current year does not appear to be in it.
Structural purchasing power repair
In addition to the incidental measures, the government is also investing money in structural purchasing power repairs. The rate in the first bracket of the income tax (for incomes up to almost 70,000 euros) will be reduced. The increase in the minimum wage (now in 3 steps of 2.5 percent per year) will be brought forward, so that the associated AOW and social assistance benefits will also rise sharply from 1 January.
In order to pay for the measures for the long term, the government will place the bill with the business community, among others. SMEs will pay more profit tax, the rate for profits up to 2 tons will go up. The cabinet also wants to increase the mining levy in order to tax energy companies that earn a lot from the high prices more heavily.
Wealthy people are also hit harder. That would go through a higher tax rate in box 3, where the money of savers and investors is.