IMF: Dutch tax system encourages taking on too much debt

The International Monetary Fund believes that the Dutch tax system encourages the accumulation of debt and has advised the Dutch authorities to address the situation. According to the IMF, both Dutch businesses and individual consumers are guilty of borrowing too much.

The IMF issued this advice in a report on the Dutch economy that was published on Tuesday, NU reports.

The IMF has called on the Dutch government to focus less on labor taxes, and pay more attention to taxes around consumption and capital income. Home ownership can also be taxed more heavily.

The IMF also found that the Dutch housing market is still too focused on buying houses, which contributes to high household debts. To remedy this, mortgages relative to the value of houses should be reduced more rapidly. A higher pace on the reduction of mortgage interest deductibles would also help.

The IMF highlighted a healthier situation in the Dutch economy. The upswing of the Dutch economy after the recession is expected to continue next year and an extra boost from government will help growth, according the the IMF.