In the agreement a levy of 16 percent is taken out over the 2012 wages. It is not clear to the Council of State, the cabinet’s most important advisor, why companies should foot the bill for this levy instead of the ones receiving the high incomes. In the advice published on Monday, the Council asks the cabinet for a better explanation. It also asks why the limit is set at 150,000 euro.
Severance Pay
The Council also questions the measure which will substantially increase the levy in place on excessive severance pay. According to the Council the measure will not yield much and will not change anything in the already existing severance arrangements. The cabinet sent the detailed five party Budget agreement to the Lower Chamber on Monday. The Council of State says it understands that the agreement, which was created under a lot of pressure, was a necessity in order to organize the public finances. But it is also wary about the unclear exact consequences on the citizens’ spending power.
VAT
There are also questions about reversing the VAT increase on the performing arts, which was only established last year under a lot of protest. If amendments are followed by yet more amendments, this will only result in extra costs, according to the Council of State. The Council would also have preferred to have received more arguments on why the untaxed reimbursement of travel expenses should be axed. In its reaction to the Council the cabinet will not address this issue on Monday. Instead it has been decided to present the details of the plan in the tax plans for next year which will be presented to the Chamber this fall.
ANP