Almost entire opposition wants to keep dividend tax

All but one of the opposition parties signed a GroenLinks legislative proposal to reverse the proposed abolition of dividend tax in 2020. With most of the opposition parties being against the controversial measure, it seems all but certain that the abolition of the dividend tax will play major roll in the Senate elections next year, NU.nl reports.

The legislative proposal was supported by 71 parliamentary seats - GroenLinks, PVV, SP, PvdA, PvdD, 50Plus, Denk and FvD. Only the SGP, 3 seats, did not sign it.

The SGP did not sign the proposal because the party finds it "premature" to be against a law that hasn't even been dealt with in parliament yet, a spokesperson said to the newspaper. Though it is no secret that the SGP is not a fan of the dividend measure and a negative vote on it can be assumed, the spokesperson added.

The government officially announced on Budget Day that dividend tax will be abolished in 2020. The measure will cost the Dutch treasury nearly 2 billion euros every year. Coalition parties VVD, CDA, D66 and ChristenUnie all stated that they will continue to support this measure, despite the mountains of criticism. The coalition has a one seat majority in the Tweede Kamer, the lower house of Dutch parliament.

As soon as the abolition of dividend tax is approved by the Tweede Kamer later this year, the GroenLinks 'reversal bill' will be submitted. The initiators want to increase pressure on the cabinet and hope that Prime Minister Mark Rutte will eventually withdraw his proposal.

If that does not work out, GroenLinks will focus on the Eerste Kamer, the Dutch Senate, election next year. The coalition only has a one seat majority in the Senate, and it is therefore conceivable that they will lose their majority in the election. That means that they will have to get help from opposition parties to pass anything through the Eerste Kamer.

"If the government comes with a bill to the opposition to talk about support for that law, then I will hand them our bill on the dividend tax", GroenLinks leader Jesse Klaver said about that.

The opposition parties denounce the fact that the abolition of dividend tax did not appear in any of the coalition parties' election programs. They also say that the cost will not benefit the Dutch economy directly - foreign shareholders in Dutch multinationals and foreign governments will benefit financially from this measure.

Further more, the opposition parties do not believe that the measure will achieve its goal - to keep companies in the Netherlands and attract foreign companies. The claim that the abolition of dividend tax will result in this is also supported by few economists, making the measure increasingly difficult to defend, according to the newspaper.

But the coalition parties still stand behind this measure. If companies decide to leave the Netherlands because dividend tax is not abolished, that can not be reversed, they warn.