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Deferral of implementation after assessment of donation deduction

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Philanthropy is about charity: the voluntary provision of knowledge, skills and networks. And about money. The dreaded estimate of the gift deduction recently appeared. Outgoing Secretary of State Van Rij (Finance) sent the report to the House of Representatives. The new government must decide. And yet the power of civil society is more important than ever.

A lot is at stake. The basic principle of the budget rules is that if the existing tax systems are evaluated negatively, they will in principle be abolished, adapted or, if necessary, converted into support. SEO Economic Research states in its assessment that the current arrangement is efficient but not efficient. Part of the justification comes from the fact that too little extra is given through the gift deduction.

Not effective

The increase in donations caused by the gift deduction is smaller than the size of the tax credit. Part of the budgeted expenses accrues to the giver instead of the beneficiary. In addition, according to SEO, it is difficult for the tax authorities to implement the donation deduction. Due to manual checking, a limited number of errors can be tracked. In addition, the non-use of the gift deduction is high. Finally, the tax advantage goes largely to higher incomes. According to SEO.

Granting of support

One of the options is the donation support known from the United Kingdom. In addition to the gift, the recipient – not the giver – receives a percentage related to the amount of the gift. This support system will be compatibility which is called a government gift Matches with the subsidy percentage. After implementation, the feasibility improves for the government and the donor, and the feasibility decreases for the receiving institutions.

Mutual good

We know. As long as the gift deduction is in place, there will be criticism of this tax system. Many finance committees and policy authorities have written reports in the past showing that the system is overachieving. Cantus firmus: too few people use it and it is an elite system for those who can save money. The question is whether a government that does not have a monopoly on the public good should not adopt a more neutral position.

Quiet power

Donation deduction has great social significance. Charity is a platform for voluntary contribution to society. Without it, the Netherlands would end up screaming and grinding, as one opinion leader recently put it. In the Netherlands, 5–6 billion euros are given annually, which is about 0.8% of the gross domestic product. More than 40% of all Dutch people do voluntary work. This fundamental contribution promotes social cohesion and shows where government and markets fall short.

Balance of power

The new government should promote a vibrant civil society. Philanthropy is one of its pillars. Then even more – less strictly institutionalized and less punitive – networks and relationships will be created. Citizens are unlikely to stick together like loose sand. With civil society As a third power, the spatial power can be filtered. In a polarized and complex society, this is an attractive perspective.

Bert Koopman is editor-in-chief of Philanthropy Platform DDB (online, print, events).

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