The lower house of parliament on Wednesday voted in favour of the government’s tax reform plan, which will generate income tax cuts of up to €5bn.
However, despite the support of the opposition Christian Democrats and several independent MPs, there is still not enough backing to guarantee the measure will pass in the senate and therefore become law.
Tax minister Eric Wiebes has warned that millions of taxpayers will be confronted with an additional tax demand in 2017, if the plan is not approved.
Next year’s preliminary tax demands already take the income tax cuts into account and this will have to be clawed back if the new law does not come into effect, Wiebes said.
In total, four million people have received a preliminary tax demand which will be incorrect if the tax cuts are not implemented, he said. In addition, hundreds of thousands of people will have less money to spend than forecast, the minister said.
If the reforms are not passed, a number of other measures will also be put on ice. These include allowing parents to give higher tax-free gifts to their children and increasing the tax on mineral water and soft drinks.
The senate is due to vote on the plan on December 15, so Wiebes still has several weeks to make concessions to opposition parties in an effort to win their support, commentators said.
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