IMF Staff Country Reports

Kingdom of the Netherlands—Netherlands: Selected Issues

Publication Date:

February 11, 2016

Electronic Access:

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Summary:

This paper aims to contribute to the discussion by sketching ways in which the taxation equity-efficiency frontier could be shifted outward in the Netherlands. In a nutshell, we argue that significant efficiency gains could be achieved by shifting the tax burden away from labor, and toward consumption and capital—especially housing. The detrimental impact of the tax-benefit system on labor supply—in particular by mothers—and the insufficient and distortionary use of the value-added tax (VAT) as a revenue-collection mechanism is also highlighted in the paper. This paper also reviews the main features of the Dutch tax system and sketches the contours of a hypothetical tax reform.

Series:

Country Report No. 2016/046

Subject:

Expenditure Labor National accounts Pension spending Pensions Personal income Self-employment Wages