Cabinet wants to cut income tax, increase value-added tax

The cabinet wants to cut income tax and increase value added tax as part of a package of tax reforms, junior finance minister Frans Weekers said in statement on Wednesday evening.

‘The cabinet wants to make work and entrepreneurship more financially rewarding and to tackle fraud,’ Weekers said. The current top rate of tax in the Netherlands is 52%, payable on income over € 55,694.
The reforms will focus on lowering the tax on labour and increasing the tax on consumption, he said. This could include lower income tax rates and an increase in the amount raised for the treasury through value-added tax (btw).


‘If parliament agrees with a shift in taxation from labour to consumption then the cabinet will want to look into the effect of a uniform btw rate,’ Weeker said.
At the moment, some goods and services are subject to 6% btw, others 19%.
Other minor taxes, such as the tax on packaging, are set to disappear. In total Weekers wants to reduce the number of national taxes from 22 to 16.
In addition, the basic corporate taxation rate can be reduced from 25% to 24%, the minister said.
MPs will debate tax reforms next week.

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