The Dutch tax system needs a radical overhaul to remove the plethora of tax incentives and focus instead on raising money for the treasury, according to the ruling VVD.

There has been explosive growth in the number of financial stimuli to encourage people to install solar panels, drive electric cars and invest in green projects, the VVD’s parliamentary party leader Halbe Zijlstra says in an opinion piece in the Volkskrant.

Last year a government commission recommended simplifying the tax system by reducing the number of deductibles and merging housing, health and child benefits into a single payment.

The cabinet is due to react to that plan by July.

Investment

‘The aim of tax is to raise money so the government can invest in roads, the police and schools,’ Zijlstra said. Instead the tax system has become a means of pumping money around, the VVD parliamentarian said.

Almost two-thirds of Dutch households get some sort of benefit via the tax office and total payouts are over €1bn a month.

‘Take healthcare benefits,’ Zijlstra said. ‘Every Dutch person must have health insurance and pay premiums. To compensate for this, the government gives millions of people health insurance benefits. And to pay for this, these same millions of people have to pay tax to the government.’

According to the Volkskrant, Labour ministers have also hinted recently that the tax system is ripe for reform.

The Dutch tax system was last reformed 13 years ago.