AMSTERDAM: Dutch central bank president Klaas Knot has renewed calls for changes in the way the current tax system is applied to the self-employed, saying many are still being excluded from social security provisions.
In an interview with the Financieele Dagblad, Knot said that the self-employed had been given a large tax discount and were made exempt from paying social security premiums to allow them to build up their business.
The idea was this would eventually provide them with a pension. ‘These good intentions have led to a situation in which a number of freelancers have the disadvantage of being excluded from social provisions,’ he said. The problem is particularly acute for people like plumbers who used to be employed and have been forced to go it alone.
They are without any collective insurance against becoming too ill to work or if they lose their contracts, he said. ‘I can describe them as nothing more than day labourers,’ he said. ‘People at the bottom of the labour market who have been pushed out and then walk back in doing the same work but without the protection.’
The government should end all the tax advantages which encourage people to become self-employed, Knot said. Self-employed Some 1.3 million people in the Netherlands do some sort of freelance work, often alongside a regular job, the national statistics office CBS said in January. In total, almost 800,000 people rely solely or mainly on income from freelancing while a further 553,000 rely on another source of income – a part-time job, pension or social security benefits – to make ends meet, the CBS said. Some two-thirds of the self-employed do not have a private pension scheme. Lobbyists for the self-employed say the tax concessions granted to freelancers merely balance out some of the unavoidable expenses incurred through being self-employed, such as extra health insurance costs.
