Kingdom of the Netherlands—Netherlands: Selected Issues

IMF Staff Country Reports, February 11, 2016

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The paper sketches ways to shift the taxation equity-efficiency frontier outward in the Netherlands.
Significant efficiency gains could be achieved by shifting the tax burden away from labor, and toward consumption and capital—especially housing.
The tax-benefit system has a detrimental impact on labor supply—in particular by mothers.
The value-added tax (VAT) is used insufficiently and in a distortionary manner as a revenue-collection mechanism.
The paper reviews the main features of the Dutch tax system and sketches the contours of a hypothetical tax reform.

Shift the tax burden away from labor toward consumption and capital, with particular attention to housing taxation.
Reform the tax-benefit system to reduce labor supply disincentives, especially for mothers.
Broaden and strengthen the use of the value-added tax (VAT) as a less distortionary revenue-collection mechanism.
Design a hypothetical tax reform that reviews the main features of the Dutch tax system and implements measures to improve equity-efficiency trade-offs.

Pages: 45
Publication date: February 11, 2016
Series: Country Report No. 2016/046
Issue: 046
Volume: 2016
DOI: https://doi.org/10.5089/9781475557695.002
ISBN: 9781475557695
ISSN: 1934-7685
Subject: Expenditure, Labor, National accounts, Pension spending, Pensions, Personal income, Self-employment, Wages
Keywords: CR, earnings, Europe, freelance worker, Global, income, income tax, ISCR, net earnings, Pension spending, Pensions, Personal income, pillar II pension, rate, risk pooling, self-employed contractor, Self-employment, solvency ratio, Wages

Source: Kingdom of the Netherlands—Netherlands: Selected Issues (IMF Staff Country Reports 2016, 046).

Kingdom of the Netherlands--Netherlands: Selected Issues; IMF Country Report 16/46; January 8, 2016
- Kingdom of the Netherlands--Netherlands: Selected Issues; IMF Country Report 16/46; January 8, 2016 (PDF)