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IMF Welcomes Dutch Tax Reforms

by Ulrika Lomas, Tax-News.com, Brussels

19 June 2015


The International Monetary Fund (IMF) has welcomed the Dutch Government's plan to levy the headline value-added tax rate on a broader range of goods and services.

The Government said that it hopes to generate additional revenues worth EUR5bn (USD5.6bn) by limiting the scope of the reduced VAT rate. Currently the headline rate is 21 percent and a reduced rate of six percent is levied on water and basic foodstuffs; some pharmaceuticals; books, newspapers, and periodicals; admissions to cultural services and amusement parks; agricultural inputs; hotel accommodation; restaurant and catering services; bicycles; clothing; and hairdressing services.

Under recently announced plans, the reduced rate would only be levied on basic foodstuffs.

The IMF also welcomed reduced tax incentives for real estate, and a reduction in labor taxes. It said in a statement following a staff mission to the country that these and other reforms could potentially increase the efficiency of the tax system and promote higher employment.

The IMF encouraged the authorities to simplify areas of taxation that have become complicated and burdensome for both the tax administration and taxpayers.

TAGS: tax | economics | value added tax (VAT) | Netherlands | tax incentives | fiscal policy | International Monetary Fund (IMF) | food | tax rates | tax reform | services

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