Rise in sales tax also increases inflation

inflation rate

The planned sales tax increase could have an impact on inflation. If the value added tax is indeed increased from 6 percent to 21 percent, inflation could increase by up to 0.9 percent.

This is according to figures by Statistics Netherlands.

22.9 percent of all Dutch consumption falls under the low VAT rate. A total of 6.4 percent of goods and services will be directly affected by the VAT increase. Increasing the VAT on these goods and services to 21 percent, will lead to these goods being 14 percent more expensive.

If the entire increase is passed on to the consumer, this could have an upwards effect of 0.9 percentage points on inflation