What will the next year bring us?

Every third Tuesday in September is a significant day in the IP. It's Prince's Day (Prinsjesdag). On this day, during a solemn ceremony, the king delivers an annual speech. In his speech, he announces the opening of a new parliamentary session, talks about the government's plans and the budget for the coming year. After his speech, the king hands over a portfolio with a draft of the country's budget to the deputies of the Lower House.

So on Tuesday, September 17, 2019, plans for next year were announced. So, for example, it became clear that in 2020 the Rutta 3 cabinet will clearly be more loyal to citizens than to entrepreneurs. As a result, households will be provided with significant tax breaks, and the average purchasing power will increase by 2,1 percent next year, mainly due to the reduction in income tax for people with average earnings.

The government wants to stimulate the soonest cessation of gas use, so next year the natural gas tax will be increased by 4 cents per m3. The tax increase will continue for the next six years (1 cent per m3 per year). Electricity tax, on the contrary, will be reduced. Also, the rate of the first payment for electricity will be reduced by 0,09 cents per kWh in 2020 and will continue to decline in the coming years.

Next year, the zelfstandigenaftrek, a tax deduction for private entrepreneurs, for whom entrepreneurship is the main source of income, will be reduced by 250 euros. Going forward, this deduction will be reduced from the current € 7380 to € 5000 by 2028. In addition, the planned reduction in income tax has been canceled. Income tax for companies that receive more than 200 thousand in income will remain 25% next year.

Small entrepreneurs who are engaged in delivery and drive vans on gasoline will be at a disadvantage as taxes will be raised for them. For vans weighing more than 1350 kilograms, the vehicle tax will be increased to 21% over the next four years, while electric vans are exempt from this tax. Small and medium-sized businesses will remain in a good position, employees of small companies are entitled to tax-free Christmas payments and other benefits.

VAT on e-books will be reduced to 9%, but this does not apply to Netlfix subscriptions. Earlier, when buying books in a store, we paid a low VAT rate of 9%, but if we bought the same books in electronic form, the VAT on them suddenly became 21%. Now this situation has changed and has become more logical. This also applies to digital newspapers and magazines (VAT will be 9%) but unfortunately not to audio and video services such as Netflix. They will continue to be subject to the high VAT rate of 21%.

Oil prices continue to fall, so the rise in gasoline prices remains moderate. Recent attacks using drones and possibly missiles on two Saudi oil installations appear to be less serious than anticipated. Saudi Arabia believes it will be able to return to its previous level of oil production within two to three weeks, Reuters reported. In connection with these events, on Monday oil prices rose by 11%, but on Tuesday they fell by 6%. As a result, these fluctuations did not affect the rise in gasoline prices very much.

The 2020 memorandum mentions, among other things, the health sector. With an aging population, there is a growing demand for care for the elderly, and more jobs need to be created in this sector. However, filling these vacancies can be challenging, as universities have graduated too few medical professionals in recent years. However, in 2020, the budget for elderly care will be increased.

The average premium for health insurance is also expected to increase by about 37 euros. But this is not a final decision, but only an estimate of the government, the final amounts of insurance premiums will be determined by the insurers themselves. And these amounts will be announced no later than November 12, 2019.