The cabinet is considering introducing a new, lower tax band for income tax as part of its plans to boost spending power, the Telegraaf reported on Tuesday.

Finance minister Eelco Heinen and the rest of the cabinet aim to take a decision this week, as they finalise their 2025 spending plans, the paper said. The budget for next year will be published on September 17.

Sources have told the paper that the four parties forming the right-wing government agree on an extra tax band and that this may now be adopted by the cabinet.

However, given that everyone benefits, the measure may not meet the government’s aim to boost low-income households specifically, the paper said. Nevertheless, the sources suggest this would be the most direct and least complex way of achieving that aim.

The Netherlands currently has two tax bands, just under 37% up to €75,000 and 49.5% on income over that limit.