Should State Secretary Tjebbe van Oostenbruggen (Tax and Tax Authorities, NSC) raise the 1.3 billion euros needed to reverse the proposed VAT increase on books, sports, culture and media with other VAT increases?
In the House of Representatives, VVD and D66 agreed, they thought. They concluded a deal with the three confessional parties and the rest of the coalition so that the Tax Plan would have sufficient support in both Chambers. The government is doing more for single-income earners and is maintaining the gift deduction. In return, opposition parties CDA, ChristenUnie and SGP support the tax plan. The search for money to reverse the proposed VAT increase also continues. D66 supports the plan in exchange for that VAT promise.
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But in the Senate, D66 interprets the agreement differently than the VVD, as became apparent on Monday when the Senate debates the Tax Plan.
What caused confusion was a letter from the State Secretary sent on Friday afternoon. He wants to raise the 1.3 billion euros with VAT, he writes. Van Oostenbruggen refers to the CDA motion with which the House of Representatives hopes to stop VAT increases. The motion calls for efforts to simplify the VAT system. The current two VAT rates of 9 and 21 percent are giving rise to dozens of lawsuits on borderline cases. For example, is toothpaste a medicine? If so, it falls into the low rate.
Rock hard
Senator Carla Moonen (D66) is not happy with the letter. On Monday afternoon in the Senate debate, she mentioned that only looking for money in VAT was not according to the agreement. As far as she is concerned, the State Secretary “initially” looks at what he can collect with VAT. But if the State Secretary does not find enough money there, he will look further.
VVD senator Paulien Geerdink walks to the microphone, she sees it differently. “As far as I know,” she says, it is “a rock-solid agreement” that he is looking within VAT.
According to Moonen, Minister of Finance Eelco Heinen (VVD) said that the cabinet would take VAT as a “starting point” in the search for money. She therefore wants the State Secretary to reconsider his letter, for the sake of “unity of cabinet policy”.
Geerdink: “I heard a completely different agreement from the same minister.”
On Tuesday, when the debate continues with a response from the cabinet, Van Oostenbruggen – for the first time in the Senate as State Secretary – starts with a joke about VAT. He thus shows that he has studied a senator who regularly has a decisive vote for a majority: Senator Martin van Rooijen (50Plus).
Popping stage
If the State Secretary is not mistaken, says Van Oostenbruggen, it has been exactly fifty years since Van Rooijen defended his first Tax Plan. Van Rooijen (KVP at the time) was then State Secretary for Fiscal Affairs. Half a century ago, says Van Oostenbruggen, Van Rooijen argued for a VAT reduction on floriculture. “The complexity in the VAT system started fifty years ago.”
Senators laugh, including Van Rooijen. “That was not a proposal from the cabinet,” says the 50Plus senator. “It was an amendment from the House.”
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In the evening, Van Oostenbruggen turns to Moonen. He confirms that VAT is the ‘starting point’. He wants to find money there. The State Secretary does not want to think beyond VAT. But Van Oostenbruggen does not rule out other ways to raise the money. With that, Moonen gets her way.
Although the government intends to largely reverse the VAT increase, the increase is included in the bill. The agreement is that the cabinet must first find money and only then remove the increase from the law.
This raises questions: what if, for example, a music venue sells tickets for a concert in 2026 in early 2025? Due to the text of the law, the stage must in principle charge increased rates.
Van Oostenbruggen reassures entrepreneurs with that dilemma. He says that they can count on the low rate for the first six months. If the search for money fails and the high rate still comes into effect, the government will not send additional tax to entrepreneurs.