Out of 104 tax measures taken in recent years, only eight can be called effective. The remaining 96 are difficult to consider as effective, and, unfortunately, they do not contribute to the achievement of the intended goals. These measures only lead to additional work for taxpayers and the tax authorities themselves, and they are very rarely adjusted.
This is the conclusion reached by the Dutch Ministry of Finance (ministerie van Financiën), which, together with other ministries, has conducted research aimed at finding ways to improve the tax system.
Not only large measures, such as the granting of an interest deduction on mortgages (de hypotheekrente-aftrek) or a deduction for self-employed persons (de zelfstandigenaftrek), have proven ineffective, but also various small measures, such as an additional tax credit that may be received. aspiring entrepreneurs (de startersaftrek). The researchers concluded that it is high time to rethink the tax system.
Thus, people with low incomes no longer receive 100% benefit from a further increase in the general tax credit (de algemene heffingskorting), which is a discount in the calculation of income tax (de inkomstenbelasting). About 1/5 of taxpayers with an income of about 20 thousand euros cannot fully realize this discount.
The ministry also concluded that wage costs in the Netherlands have risen so strongly that it has become unprofitable for middle-income firms to increase their turnover by hiring more workers. This has resulted in a slight slowdown in economic growth rates over the past 15 years.
On the other hand, capital tax (vermogen) has dropped significantly in recent years. This applies, for example, to the tax on the house in which the owner lives (de eigen woning) and on the capital of the “substantial shareholders” ('aanmerkelijkbelanghouders').
Substantial shareholders are large shareholders who create capital in their own company / enterprise. This total capital turned out to be much higher than projected: 400 billion euros instead of 200 billion euros. However, these entrepreneurial shareholders, who often belong to the richest 1 percent of the population, pay a fairly low net worth tax as it goes into Box 2 of the annual income tax.
In general, the report on the study should play an important role for the next Cabinet of Ministers. It contains dozens of specific recommendations for improving the tax system. His plans include reducing income taxes, increasing taxes on capital, and possibly moving from taxes on labor to taxes on consumption.
The government is known to be preparing new plans for the tax system and public policy in general. Traditionally, they will be dubbed on Prince's Day (Prinsjesdag), 15 September. Now the coronavirus has already made big changes to these plans, and now this research will also add work to politicians. So it will definitely not be boring. We will keep you updated!
Source: https://nos.nl/artikel/2334295-onderzoek-belastingmaatregelen-meestal-niet-effectief.html
Publication Date: 21.05.2020
