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Gerrard Boot on criticism of bridging measure for self-employed

The Dutch temporary bridging measure for self-employed professionals (known as Tozo) was set up to help Dutch self-employed professionals who are experiencing financial difficulties due to the Covid-19 pandemic. Last week, the ombudsman announced an investigation into the scheme for the self-employed. Has the government let them down?

The number of applications for assistance under the Tozo scheme has dropped significantly because since June last year the partner’s income was deducted from the benefit payment. If a partner earns more than the minimum subsistence income, then the self-employed person receives nothing at all. And then there is also another ‘accounting’ catch to the scheme: because the Tozo benefit is considered to be a family income supplement, the tax authorities also add it to the partner’s income. This can be useful in the case of social assistance, so that the income of the receiver stays under the threshold for benefits.  But in the case of Tozo, it means that a partner has to pay tax for assistance given to a business that does not belong to them. Some organisations for the self-employed see this as yet another blow in these hard times. Self-employed professionals would be worse off than employees who continue to get paid.

However, Leiden Professor of Labour Law Gerrard Boot says the criticism of the Tozo is not entirely warranted. From a calculation he did in January based on figures from the Netherlands Court of Audit and the Netherlands Bureau for Economic Policy Analysis (CPB), it appears that self-employed professionals are not necessarily receiving less per person than a salaried worker. ‘It is estimated that 14.9 billion euro has been spent on 7.9 million employees, while 1.6 million self-employed professionals have received 3.7 billion euro in Tozo assistance.’ Boot believes that the assistance for the self-employed is only fair, but he also thinks it is reasonable that the level of this assistance is lower than for employees. ‘[Self-employed professionals] enjoy sizable tax advantages and pay relatively less tax’ (according to a previous calculation by the Central Bureau for Statistics, four out of ten self-employed persons pay no tax at all, ed. Volkskrant). As a result, their net earnings are higher than employees, so it is logical that they also receive less from the taxman’ says Boot in Dutch newspaper de Volkskrant.

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