The government has set out its ambitions in a fiscal strategic agenda for this cabinet period. Where are the priorities and how will they be placed over the next four years? What are preconditions and how do other tax issues fare? What will be the legislative planning? The cabinet recently informed the House of Representatives about this.
Priority 1: a Tax Administration ready for the future
For the continuity of the Tax and Customs Administration, the main objectives are in two areas: recruitment and retention of sufficient and qualified staff and modernisation of the ICT systems. The Tax and Customs Administration is working on a modernisation task of the ICT. This is necessary to ensure continuity. A modern ICT landscape is also a precondition for eventually being able to implement a reform of the tax system. There is very limited room for additional new laws and regulations at least until 2026.
Priority 2: Prepare legislation to reform the tax and benefits system
As significant improvements are not easily possible within the existing system, the government will prepare legislation to reform the tax and benefits system.
The tax system has many special schemes. Many involve a tax benefit - a reduced rate, deduction, tax credit or exemption - with the underlying aim of achieving a positive effect for society as a whole. Unfortunately, many tax schemes cannot be proven to achieve their purpose and they make the tax system more complex than necessary for citizens, businesses and the Tax Administration.
First, the government will start working on phasing out (negatively assessed) tax schemes. The reduced VAT rates on accommodation and culture will be largely abolished, as will the energy tax balancing scheme. In addition, new evaluations of tax schemes will be completed in the coming years.
Priority 3: Box 3 in calmer waters
Since the so-called Christmas ruling in late 2021, box 3 has been in the spotlight. The task this cabinet period is twofold. First, a recovery operation must take place over the past and future years in which the current legislation applies. Second, there is the legislation and implementation of the new system.
The Tax Administration has since indicated that due to the new recovery operation, there is not enough capacity available to fully implement the Bill on Actual Return Box 3 in its current form by 1 January 2027. Therefore, the government has asked to investigate which alternative implementation options are feasible by 1 January 2027 so that careful decision-making on the options can take place.
Precondition: high-quality legislation and spread of legislation
A prerequisite for successful fiscal policy is high-quality legislation. To ensure that each bill can be handled carefully in both the Lower and Upper Houses, the government considers it important to spread the submission of legislation over time. The challenge is to limit rush bills, such as the Tax Plan, as much as possible to bills for which it is necessary to deal with quickly.
Progress on other tax issues
Besides the three priorities mentioned above, the government wants to make progress on other fiscal issues. The Outline Agreement also contains a number of measures to be worked out in legislation.
Entrepreneurial and business climate: international companies can continue to count on the Netherlands being an attractive country to invest in with a stable and predictable fiscal climate. The Tax Plan 2025 already includes a number of measures to strengthen the business and establishment climate.
Taxing high net worth individuals: the government is investigating the taxation of benefits from so-called lucrative interests. An example of a lucrative interest is an equity stake obtained by a manager/employee as a reward for work, where typically, returns can be achieved that are disproportionate to the capital invested and/or the risk actually run on the investment.
Tackling tax evasion: the government has proposed a number of concrete measures in the Tax Plan 2025. After that, there is no low-hanging fruit in terms of tax constructions that can be addressed in the short term with additional measures and generate revenue.
Car taxes: in spring 2025, the cabinet will then present a plan to reform car taxes and related mobility policy. This plan will elaborate several options, taking into account the agreements on car tax reform and related CO2 reduction as included in the Dutch Recovery and Resilience Plan (HVP).
Encouraging healthy behaviour: e-cigarette use is harmful and addictive and can also be a stepping stone to tobacco smoking. The most obvious route to raise the price of e-cigarettes is to include e-cigarettes in the European Tobacco Tax Directive. Over half of adults are now overweight and that proportion is gradually increasing. As a result, they have an increased risk of health problems. Consideration is therefore being given to differentiating the consumption tax on non-alcoholic beverages by sugar content.
Climate and environment: In the coming years, the climate and environment tax policy initiated by previous cabinets will be broadly continued. The Tax Plan 2025 contains a number of concrete measures that will take effect in the coming years. Currently, the ways in which the plastic levy can be designed as of 2028 and the policy effects are being mapped out. In addition, work is underway to differentiate the air passenger tax rate by distance from 1 January 2027.
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