The trade unions are in favour of a so-called profiteer tax, whereby companies that make large profits due to favourable circumstances are taxed more heavily. At BNR Nieuwsradio, Peter Kavelaars, Professor of Economics of Taxation at Erasmus School of Economics, discusses this controversial issue.
Some advocate the renewal of the War Profits Tax Act, which was in force between 1914 and 1918. This was an extra tax on profits from essential, scarce goods. Because of all kinds of sanctions and trade blockades in the First World War, the Netherlands was economically affected, despite the fact that the Netherlands was neutral. According to professor Kavelaars, the introduction of a profiteer tax is very difficult to implement; the Tax Authorities would have to deal with a very complex system, which would increase the pressure of implementation. An alternative and much more efficient way to achieve this is to introduce a higher top rate.
United Kingdom
In the UK, they have just introduced the profiteer tax. Kavelaars doubts that it will be feasible to enforce this law, but there is an important difference: the top rate is only applied in the energy sector. This sector is easier to delineate and therefore the tax is easier to enforce. Still, the question of definition remains tricky: do you include only the pure energy sector in the tax or also the distribution sector? Kavelaars also emphasises that it is often said that the tax system in the Netherlands is too complex; such a system is therefore undesirable in the Netherlands, because it only increases the complexity.
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You can listen to the broadcast of BNR Nieuwsradio, 16 August 2022, here.