Peter Kavelaars, Professor of Economics of Taxation at Erasmus School of Economics, was featured on the NPO Radio 1 programme Dit is de Dag. Here, he discussed the abolition of the gift deductible income.
The new cabinet may want to reduce the tax benefit of donations, a report revealed. It will be debated with Dick Schoof this week. Over 250 civil society organisations and now almost 35 thousand citizens have already signed the petition. Under the scheme, all donations are deductible at the lowest rate, thus providing an advantage. Its cost is currently calculated at around €400-420 million. The current cabinet wants to almost halve the cost due to budget cuts, bringing it to around €250 million.
There have been many studies on the effectiveness of the scheme. Somewhere, the scheme is expected to have the effect of increasing donations. However, the scheme has been found to be very inefficient in its implementation. This is evidenced, for example, by the fact that many taxpayers do not know that the scheme exists, this would be about 30% according to Kavelaars. The scheme also proves difficult to implement and control, and fraud is increasingly being committed, often by the very wealthy. They then set up their own charity in an anbi foundation to which they donate the money, this way the money actually remains in their own hands but with the gift deduction. Kavelaars says that of all people owning 25 million or more, about 60% are expected to have made such an arrangement.
Kavelaars does not believe that the reduction in the gift deduction scheme will have much impact on charitable donations. Ultimately, people give money because they support a particular cause, something that would remain. This scheme just complicates things, rather than simplifying donations.
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You can listen to the full programme from NPO Radio 1, 1 July 2024, here.