The top Dutch tax rate – currently 52% on earnings over around €56,000 – is likely to be cut to 50% or below, according to media reports on Tuesday.
The Telegraaf says the ruling VVD and the D66 Liberals have suggested cutting the top rate to 49.5%, to compensate home owners for the reduction in mortgage tax relief.
Tax rates in the two lower tax bands may also be reduced, the paper says.
Nos television also says tax cuts are likely following Monday night’s debate on the government’s 2014 tax plans. A majority of MPs, including coalition party Labour, back a cut to 50% for the top rate and 38% for the second band, the broadcaster says.
The government is in the process of phasing out tax relief on mortgages, currently one of the most generous systems in Europe.
In May, the government’s macro-economic planning agency said the top income tax rate of 52% is too high and that a top rate of 49% would maximise the amount of money coming in to the treasury.
The high tax rate means people choose to work fewer hours rather than see more of their money disappear in tax, the organisation said.
Thank you for donating to DutchNews.nl
The DutchNews.nl team would like to thank all the generous readers who have made a donation in recent weeks. Your financial support has helped us to expand our coverage of the coronavirus crisis into the evenings and weekends and make sure you are kept up to date with the latest developments.
DutchNews.nl has been free for 14 years, but without the financial backing of our readers, we would not be able to provide you with fair and accurate news and features about all things Dutch. Your contributions make this possible.