Widespread welcome for new tax plan, but coalition partners silent

Plans to completely overhaul the Dutch tax system, drawn up on behalf of the outgoing government, have been widely welcomed, according to media reports on Wednesday.

The plan involves reducing tax break on mortgages in return for lower income tax. Other tax deductions should also be cut or scrapped and value-added tax (btw) should go up to 8% and 23%, the plan’s creators say.
The plan involves reducing the current four tax bands to two, and would introduce a top rate of 49% from €60,000 a year. The current top rate is 52%.
The NRC reports the plan is widely welcomed by MPs.
However, MPs from the VVD and PvdA – the two parties currently involved in talks on forming a new government – declined to comment so as not to prejudice the negotiations.
Elbert Dijkgraaf of the fundamentalist Christian party SGP told the NRC: ‘The report shows it is possible to scrap tax deductions and reduce income tax while maintaining spending power.’
While welcoming the plan as a whole, the Liberal democratic party D66 said it did not agree with plans to increase the tax on freelancers and the self-employed. ‘These are difficult economic times and many people start for themselves because they cannot find a job,’ the party said.
The Volkskrant says the plan has good news for the VVD and Labour. Calculations by the government’s macro-economic planning bureau CPB show the tax plan would breathe new life into the housing market and lead to the creation of 140,000 new jobs.
‘This a a goodie for both the VVD and PvdA,’ the commission chairman Kees van Dijkhuizen said. He hopes the recommendations will be included in the cabinet formation talks.

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