Reduction of the tax burden will be noticeable from 2020 onwards

Peter Kavelaars, Professor of Fiscal Economics at Erasmus School of Economics

Peter Kavelaars, Professor of Fiscal Economics at Erasmus School of Economics, responds in BNR Nieuwsradio to the annual report of the Dutch Council of State on public finances, which was published on Monday, 15 April 2019. The Council of State is concerned about the development of the tax burden. Contrary to what the Third Rutte Cabinet has always claimed - that there has been a reduction in the tax burden on households since this year - the government’s advisory body notes that the collective tax burden is relatively high. According to Kavelaars, citizens will notice a slight reduction in the tax burden in the future.

‘The government has indeed announced that the tax burden will decrease, especially for citizens but also for businesses, but that it only on the programme from 2020 onwards,’ says Kavelaars. ‘The report of the Council of State focusses on the period in the past and over that period it can be seen that the economy is doing well the last past two years.’ The picture that is painted by the Council of State, according to Kavelaars, is that the economic growth results in much more tax being generated. In the opinion of Kavelaars, there is something to be said for that this will be channelled back to the citizens and businesses, ‘but that will thus happen from 2020 onwards and only for a very small part in the year 2019.’ Furthermore, Kavelaars feels that because the economy is doing so well now, more money can be returned to citizens and businesses than that was agreed on in the Coalition Agreement. ‘If things get worse economically in the future, it will be very difficult to implement an additional tax cut.’

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The entire item of BNR Nieuwsradio, 15 April 2019, can be listen to here (in Dutch).