Dozens of new laws, rules, and regulations went into effect in the Netherlands at the stroke of midnight on Tuesday. Among them, a cut to the 30-percent ruling, new income tax credits, mortgage caps, a sales tax increase, expanded childcare subsides, and more rights for cities to seize homes related to the illegal drugs trade.
SP leader Emile Roemer wants to reduce VAT from 21 percent to 19 percent. He feels that the sales tax increase in 2012 was at the expense of small and medium sized businesses - the job engine of the Dutch economy.
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.
GroenLinks is against the part of the Cabinet's tax reform plan that would increase the value added tax from 6 percent to 21 percent. This means that the plan may not get the necessary support in the Senate.
Sources close to the secret cabinet negotiations on a package of tax reforms say that the government is planning to increase sales tax on many goods and services to generate an extra five billion euros in revenues, according to the NRC. The cabinet wants to raise the tax to balance out an effective cut in income tax for many living in the Netherlands.