Industry fights on for tax-free computer

10 September 2004

AMSTERDAM — Fearing an annual EUR 500 million loss, the Dutch computer sector plans to launch a scheme in autumn as an alternative to the abolished tax-free home computer regulation.

Chain stores, including MegaSellers and Dunnet Computers, said they can offer the public both fiscal and financial advantages in the purchase of a new computer.

Dunnet director M. Castiglione said good business could still be done with large companies and that not everything had been lost. “We just have to be more creative”.

And the financial director of MegaSellers, P. Eitjes, said the so-called cafeteria model could be used as an alternative for the scrapped pc-prive scheme, newspaper De Telegraaf reported on Friday.

The cafeteria model allows workers to use part of their gross income for a more expensive lease car or childcare. Eitjes said computers could also come under the scheme, provided that the government does not prevent it when Finance Minister Gerrit Zalm presents the 2005 Budget on 21 September.

The tax office could not confirm on Friday whether the cafeteria model could be used for such a purpose as computer purchases.

The computer retail sector has not yet given up the fight to save the pc-prive scheme. Some 30 retailers such as Dixons, Dynabyte and Computerland are together trying to mobilise consumers to thwart the Cabinet’s plans.

“This is unique for our branch. Normally we are fighting each other,” Eitjes said.

As one of the initiators of the campaign website www.b2bit.nl, Eitjes hopes to present the government’s plans to abolish the pc-prive scheme by sending it 100,000 protest reactions.

Faced with a struggling economy and a worrying budget deficit, the cabinet decided at the end of August to scrap the pc-prive system, under which employees could buy a home computer with a loan from their employer for a tax-free amount.

Employees taking advantage of the pc-prive scheme had to repay the financial assistance from the employer either by forfeiting holidays or leave days. The computer — intended for the home — had to be partly used in connection with the person’s work.

In abolishing the scheme, the government hopes to save EUR 280 million, but the computer branch is concerned over the financial impact. Eitjes said the sector stands to lose EUR 500 million per year.

Subject: Dutch news