News item | 03-06-2022 | 14:15
In the event of a negative evaluation, the cabinet will abolish or cut back tax regulations. This is one of the actions that will be taken in the coming years towards a simpler and more modern tax system. This is stated in the fiscal policy and implementation agenda that State Secretary Van Rij has sent to the House of Representatives.
The tax system contains a large number of tax regulations. These are exceptions such as deductible items, reduced rates or exemptions. Every exception leads to a more complicated tax system and to budgetary losses. It is therefore extra important to properly evaluate these schemes and to link actions to them. In doing so, the government is also following up on the advice of the Court of Audit. Even if signals or doubts about a tax scheme come in in another way, it can be examined.
State Secretary Van Rij: “It is often difficult for citizens and companies to find their way through the many tax rules and regulations. Complex regulations are often not easy to implement for the tax authorities. And it is becoming increasingly difficult for policymakers and politicians to understand the consequences of policy and legislation for citizens, companies and the tax authorities. During this cabinet term, we are therefore taking the first steps towards a simpler tax system. We do this, among other things, by abolishing or cutting back on tax regulations in the event of a negative evaluation. And also because we consistently involve implementation when making new laws or rules.”
The evaluations look at whether tax schemes are effective and efficient. Is what has been agreed happening, does the scheme have a clear purpose and is government intervention necessary? Are there other or cheaper ways to achieve the same result? The government undertakes that if the answer to one of these questions is negative in upcoming evaluations, the starting point will be to abolish or cut back on this scheme. It may also be an option to convert a tax scheme into a subsidy.
In the coming period, evaluations are planned of the reduced VAT rate, various entrepreneurial schemes, the innovation box and special schemes in car taxes. An annual overview of this is provided in the Budget Memorandum. Various schemes will also be abolished in the near future, such as the gift exemption for the owner-occupied home, the averaging scheme and the fiscal old-age reserve. Before the summer of 2023, the cabinet wants to come up with an approach that includes further steps to simplify the tax system.
The tax policy and implementation agenda contains an overview and an initial elaboration of all tax measures that the government expects to send to the House of Representatives in the near future. The tax system continues to be modernized, including proposals to make the tax system fairer and contribute to climate goals through taxation.
The government also indicates its ambitions for the implementation of the Tax and Customs Administration. Such as putting citizens and businesses first, putting the foundations of the organization in order, being open to signals and recognizing and solving mistakes made.
With the tax policy and implementation agenda, the House of Representatives is informed earlier than before about legislation yet to be submitted and its consequences for implementation. This contributes to more transparency and more opportunity to prepare the parliamentary debate. The commitment to actively publish the underlying official decision memorandums for all tax bills also provides more transparency.