The House of Representatives wants to expand the remission of municipal taxes

A majority of the House agreed on Tuesday to the proposal of MPs Mohammed Mohandis (GroenLinks-PvdA) and Sandra Palmen (NSC). At the end of February, they submitted a motion to expand the limit at which municipalities may exempt citizens from municipal taxes, such as the waste tax. This limit is currently much lower than the asset threshold that applies to the right to social assistance, which means that minimum wage earners miss out on remission and have to rely on their reserves or assets.

Initially, a majority seemed to emerge for this, but this was compromised after outgoing minister Hugo de Jonge sent a critical letter to Parliament. In it he identified an ‘essential difference’ between the right to social assistance and remission. But he was particularly critical of the financial coverage of the plan and fears that municipalities’ income will decrease, causing other citizens to have to pay more.

That criticism also led to doubts in the House, after which Mohandis and Palmen did not yet put their motion to the vote and adjusted it. While the proposal initially aimed for an immediate and definitive extension of the remission standard, the motion now asks the cabinet to investigate its legal basis and to look at the consequences. The ‘social benefits’ that expansion will yield according to the MPs must also be taken into account.

The House does want the cabinet to make it possible for municipalities to align the remission standard with the social assistance limit. This is mainly a compensation for the four largest municipalities, which have been struggling with this for some time. At the end of last year, Utrecht tried to adjust the standard on its own, but was then rebuffed by De Jonge.

More people eligible

If the government responds to the wishes of the House, municipalities that wish to do so will be able to increase the capital limit pending possible legal enshrinement. In concrete terms, this means that many more people are eligible for remission. Municipalities are now only allowed to do this for minimum-income singles if their assets are less than 3,441 euros. This limit will then be at the level of the social assistance limit: 7,575 euros.

But that expanded limit will not apply to everyone. Without legal anchoring, municipalities are not obliged to waive more people’s taxes. If they cannot find the finances to cover the missed tax, they can abandon it.

This threatens to increase the differences between municipalities even further. Even now there are problems with this, because municipal policies for minimums are sometimes very far apart. For example, someone in one municipality may be entitled to discount passes and other allowances for people with a low income, while people with low incomes in a neighboring municipality receive nothing.

Intermediate step

Nevertheless, Mohandis and Palmen think it is important to increase the space in anticipation of possible legal anchoring. “We realize the dilemma,” says a spokesperson for GroenLinks-PvdA. ‘We would have preferred to introduce it generally, but now we wanted to take an intermediate step. Also at the express request of the four largest municipalities.’