Omtzigt targeting expat tax breaks in NSC's demands for budget update

The NSC will again push to cut the tax breaks of expats during the negotiations on the Spring Memorandum, the spring update to the national budget, party leader Pieter Omtzigt told the Telegraaf. He wants to use the money raised by these cuts to lower the gas tax and to help solve bottlenecks in the system for people with disabilities.

At the end of 2023, Omtzigt pushed a plan through parliament to cut the 30 percent ruling for expats, that time to cover the bill for lowering interest rates on student loans. The move led to outrage in the business community, with companies like ASML threatening to expand outside the Netherlands, and the former Cabinet scrambling to make them stay. Notably, the current Cabinet, which includes the NSC, largely reversed the cut to the 30 percent ruling on Budget Day last year.

The criticism didn’t change Omtzigt’s mind “that something needs to be done here,” the NSC leader told the Telegraaf. “We are heading towards 200,000 people from abroad who receive 27 percent of their income tax-free. If we want to make the economy fairer, we should not have groups of people who pay less tax,” he said. An investigation by Follow the Money last year found that around 95,000 people had the expat tax break.

Omtzigt wants to use the money freed up from cutting the 30 percent ruling to lower the gas tax by a “few cents “ per cubic meter on top of the reduction already mentioned in the Schoof I Cabinet’s coalition agreement. “That is a radical turnaround if you look at the previous Cabinet, which doubled the tax on gas to almost the highest in the world. On basic things that you need to heat your house, we say: then you have to be careful with your taxes.”

The NSC will also reiterate the wish from its election manifesto to reform the system for people with disabilities.

Finance Minister Eelco Heinen will likely receive this wish list with dismay. Last week he urged the coalition parties to hold back a bit because the treasury is facing “mainly setbacks” combined with “a great many wishes.” Nevertheless, the NSC is the third of the four coalition parties to announce a wish list. The VVD wants cheaper childcare and a lower tax on electricity. The PVV wants rent reductions, lower VAT on groceries, and a lower gas bill.

Many in national politics worry that the Spring Memorandum will be the final blow for this Cabinet. The Schoof I coalition nearly collapsed during the budget negotiations, and the financial situation hasn’t improved. The treasury is facing setbacks around climate change, nitrogen, VAT, the box 3 tax, and more defense spending, among other things.

Outside of the budget talks, Omtzigt also wants to set maximum prices for veterinarians and childcare and no longer allow companies to determine the price they charge for their products in different countries. He pointed out that a jar of Hak apple sauce costs over 2 euros at Albert Heijn in the Netherlands, but only 89 cents in Belgium. “That makes no sense at all. That is simply a market failure in a European context. If we had Italy’s interest rates on mortgages, that would save 100 euros per month. The internet is considerably cheaper almost everywhere.” He wants to invite companies to parliament to discuss this subject soon.