Cabinet earmarks EUR 500m for income tax cuts in next month’s budget

The NRC says the measure has the approval of the three opposition parties who work with the government and will be announced as part of the budget presentation on September 16.

The tax cut is in addition to minor cuts in the higher tax bands agreed last year.

The paper says one source has informed it the income tax rate in the lowest tax band – up to EUR 19,645 – will be cut by 0.3 percentage point to just under 36 percent.

Income tax in the second tax band – up to EUR 56,631 – is currently 42 percent and above that 52 percent.

In addition, ministers plan to boost spending on development aid by EUR 375m.

The money will go for emergency help and to support refugees in their region of origin. An extra EUR 50m will also go to the defence ministry.

Negotiations

The paper says the ruling coalition – the right-wing Liberal VVD and the Labour party (PvdA) – will complete their negotiations on the 2015 spending plans with the opposition parties next week.

The cabinet needs opposition backing to ensure its plans have majority support in the upper house of parliament.

The government has extra money for tax cuts because of the improvement in the economy.

In particular, fewer people are claiming unemployment benefit than expected and spending on healthcare has also generated windfalls, the NRC said.

The draft budget will be sent to the Council of State at the beginning of September.

MPs will also be given the documents four days ahead of their formal publication.

For the past four years, the documents have been kept secret up to the presentation because of leaks.

© DutchNews.nl