The government's plan to increase the highest VAT rate to 21,4 percent is immediately met with strong opposition from the House of Representatives.
The increase, which is expected to yield around 1,3 billion euros, is intended to close a budget gap of 1,2 billion euros. But several parties are already making it clear that they absolutely do not agree with this.
Documents obtained by the AD show that the VAT increase is being presented as a “preferred option” within the cabinet. The additional income became necessary after the previously planned VAT increase on sports, culture and books was scrapped. However, there is little support for this measure, both within and outside the coalition parties.
daily life more expensive
The current VAT rate of 21 percent applies to a wide range of goods and services, including clothing, electronics, streaming services and the purchase of a new kitchen or car. An increase to 21,4 percent would make these products and services more expensive for consumers. In addition to the VAT increase, another scenario is also on the table: abolishing the low rate of 9 percent and switching to a single uniform rate of between 17 and 18 percent. However, this would also mean that essential products such as fruit and vegetables would become considerably more expensive, which would put further pressure on the purchasing power of the Dutch.
Political resistance to the proposal is high. PVV leader Geert Wilders immediately responded fiercely on X (formerly Twitter): “No way! No VAT increase. We’re not going to do that!” He argues that it would be better to cut development aid to cover the budget deficit.
The VVD, which initially reacted with hesitation, has also spoken out against the VAT increase. VVD leader Dilan Yesilgöz emphasized: “Now that it is clear that the State Secretary really has a plan for a VAT increase, it should be clear that the VVD does not agree with this. This makes life much more expensive for many Dutch people. There must be a better proposal.”
Caroline van der Plas of BBB even calls the plan “completely unacceptable.” Her party advocates tax relief and believes that the government should be more frugal with tax money instead of passing the bill on to citizens.
unfeasible plan?
According to political reporter Xander van der Wulp, the chances of the VAT plan being adopted seem slim. He points out that both coalition parties and opposition parties have recently advocated tax cuts and measures against high inflation. “The fact that this plan has been proposed at all shows how big the challenges are that the cabinet is facing when drawing up the spring memorandum,” says Van der Wulp.
The coming months will see negotiations on the national budget, in which billions of euros must be found to cover current expenditure. However, without the support of a majority in the Senate, the cabinet will have to look for alternative solutions.
