New coalition parties look into simplifying Dutch income tax system

The four parties currently involved in negotiations on forming a new Dutch government are considering a major overhaul of the income tax system, RTL Nieuws said on Tuesday evening.

The parties are considering abolishing two of the current four tax bands, so that most of the population would just pay one rate of tax across their income, the broadcaster said. Only high earners would pay a different rate on earnings over a certain limit.

Both the Christian Democrats and ChristenUnie are keen to see a standard rate of tax introduced in the Netherlands. In addition, this would lead to fewer claims on top up housing and healthcare benefits, the parties say.

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

No figures have yet been given, although RTL suggests a basic tax rate of 35% could be an option. However, the change will cost billions of euros and the new government will face a tricky task in finding so much excess money within the budget, the broadcaster said.