Economic policy advisors say eliminating VAT on produce and repairs is too complex

Proposals from politicians and interest groups to abolish the value added tax for more products and services will make the tax system even fuzzier, said Pieter Hasekamp, the director of the Netherlands Bureau for Economic Policy Analysis (CPB). The independent organization researches the economic impact of various initiatives.

After recent talks about eliminating the VAT on fruit and vegetables, there was also a recent call to scrap the sales tax on repair services. These proposals are flying through the air where it could end up "being a bit like sculpting with VAT," Hasekamp said.

It is up to politicians to prevent complicated new tax schemes as much as possible. Hasekamp emphasized that 163 billion euros worth of schemes are considered to be needlessly complicated. Of course, there is always something to be said for VAT exemptions, but he wondered if policy-makers are actually working efficiently, and if the VAT system will remain manageable as a whole.

It is important that the government, and also a new Cabinet in the future, is transparent about which tax schemes are inefficient, unnecessary or unnecessarily expensive, he said. As far as Hasekamp is concerned, a new Cabinet must also continue with mandatory evaluations of tax schemes. If they score inadequately, there should also be consequences, he believes. That would mean stripping the schemes down or abolishing them.

Court of Audit Board Member Ewout Irrgang also warned the parties that are now negotiating to form a new coalition government. "Don't make things even worse," he said. He would have preferred that parties had considered in advance the feasibility of the proposals in their election manifestos.

“Check with the tax authorities whether your proposals are feasible,” said Irrgang. “If they aren't, either adjust them or don't do it.” In his view, feasibility for citizens and companies should also receive more attention.

On the other hand, Irrgang warned that the abolition of regulations does not necessarily make the work of the tax authorities any easier. "If you are going to simplify, you have to make sure that the simplification is feasible."