Half of water boards refuse tax remission for poor entrepreneurs

• Guide Pols

  editor Economics

In half of the water boards, self-employed people living in poverty simply have to pay taxes. Employees or benefit recipients with an equally low income do not have to do this, according to figures from the Union of Water Boards. Some municipalities also exclude poor freelancers.

This concerns remission of local taxes, for example for the purification of sewage water. Residents who have an income equal to the amount of the social assistance benefit or less do not have to pay this type of tax.

But municipalities and water boards may choose to exclude entrepreneurs from the remission, even if, for example, they only have 1000 euros left over per month. As a result, they still lose hundreds of euros in local taxes every year.

Interest groups for minima are displeased with the state of affairs. They call the exclusion “strange” and “painful”.

How high is the assistance standard?

The amount of assistance depends on the family situation. For example, a single person (parent) receives a gross amount of 1,196 euros per month.

Employees or entrepreneurs who earn less than that can have their income supplemented up to that amount. For example, a single person who earns 600 euros per month can still receive 596 euros in assistance.

There are also entrepreneurs who do not apply for extra government support, even though their income is below the social assistance limit.

The Drents Overijsselse Delta Water Board is one of the water boards that exclude self-employed persons with a low income. “Broadening to self-employed persons is not in line with our policy on granting remission,” says a spokesperson, without explaining.

The water board does not intend to adjust it, although it is emphasized that this may change after the water board elections on 15 March, if this is decided in the new coalition agreement.

‘This exclusion is bizarre’

The National Client Council, which stands up for the interests of benefit recipients, is very displeased with the situation and calls it painful. “It shouldn’t matter whether you are an employee or a self-employed person,” says official secretary Peter van Leeuwen. The council wants to investigate whether the exclusion is permitted at all.

Divosa, the association of municipal directors in the social domain, also finds it strange that entrepreneurs are not eligible for the remission of local taxes. “They’re still low-income residents.”

The Association of Water Boards already informed the water boards in 2011 that they may choose to include small entrepreneurs in the remission. Nevertheless, almost half of the water boards still opt to exclude self-employed persons without employees.

Below assistance level

Self-employed people without employees are also likely to get into trouble at the other water boards. Not by exclusion, but by a strict asset test. Is there more than 1175 euros (in the strictest water boards and municipalities) in the bank account? Then the self-employed person cannot get a remission.

While entrepreneurs sometimes get paid just before the reference date, but still have to pay for everything after that date.

Something like this happened to Stella de Swart from Amsterdam, author of the book Poverty you get for free. She started a business as a writer because she wanted to document first-hand experiences from welfare. Any income from this will be deducted from the special assistance for the self-employed.

Because there were a few thousand euros in her account at the time of the check, she suddenly had to pay local taxes again.

“The money in my account still has to be settled with the self-employed assistance,” says De Swart. “Entrepreneurs receive this specific assistance as a loan that they have to repay. I have now paid the tax from the money that was set aside for this.”

As a result, a new gap will soon arise, De Swart fears. “I live with my children in practice below welfare level, the situation is so difficult. If I didn’t have my children, I wouldn’t last.”

The municipality of Amsterdam says that the reference point there is December 31. “Tailor-made solutions are possible for entrepreneurs who happen to have a lot of turnover just before, while they still have to incur costs afterwards,” says a spokesperson.