Small businesses angered by likely sales tax hike

Small and medium sized businesses are furious about the governments alleged plan to get rid of the so-called "low tariff" value added tax rate on most products and services. Michael van Straalen, chairman of MKB-Nederland, calls the plan "a stab in the back of entrepreneurs". "These entrepreneurs have just survived the crisis and are now scrambling to their feet. The VAT increase is absolutely unacceptable." he said to NOS. Detailhandel Nederland also think that abolishing the low VAT rate is a bad idea. "Because of this products will become more expensive, so people will buy less. This will have serious consequences for retailers revenues." a spokesperson said to the broadcaster. The tax plan involves raising the six percent “low tariff” value-added tax rate to the current 21 percent “high tariff” on everything except food purchases. Currently, the six-percent rate applies to many services and goods like clothes, books and non-alcoholic beverages.