People working in the Netherlands are expected to pay around €4 billion more in income tax next year, according to leaked Prinsjesdag budget documents.
The documents, obtained by RTL News, show that the tax increase could grow to nearly €8 billion a year over the longer term.
The Dutch Cabinet has set aside around €1.7 billion to help protect people’s purchasing power. However, this will only partly offset previously planned tax increases.
The higher tax burden comes mainly from changes involving the first and second income tax brackets, which are expected to bring billions of euros in additional revenue to the government.
The extra revenue was originally intended to help cover a financial gap linked to plans by the previous Schoof Cabinet, including a proposal to halve the compulsory health insurance deductible.
That reduction will no longer happen, but the planned income tax increase will remain. At the same time, the expected rise in health insurance premiums associated with lowering the deductible will also no longer take place.
Leaked figures reportedly show that the purchasing power of the average person in the Netherlands will fall by around 0.1 percent next year. Low-income households and pensioners, however, are expected to see a small improvement on average.
Plans to introduce a higher tax on wealth have reportedly been dropped. D66 minister Hans Vijlbrief supported the proposal before the summer, while VVD minister Eelco Heinen strongly opposed it.
