Fate of VAT raise remains unclear

24th April 2008, Comments 0 comments

Employers and union call for Dutch cabinet to drop plans to raise VAT, but PM can’t make any promises as yet.

24 April 2008

THE NETHERLANDS - The Dutch cabinet has been holding its traditional spring talks with employers' and workers' representatives, who are known rather euphemistically as the 'social partners' here in the Netherlands.

NRC Handelsblad reports Prime Minister Jan Peter Balkenende as saying that the "constructive meeting" showed all involved had learned the lessons of the past when pay increases bogged the economy down.

However, there were no promises on a key demand from both unions and employers that the government drop plans to raise VAT from 19 to 20 percent. "It depends on how things go. The social partners understand that," explained the PM.

De Telegraaf paints a far less cosy picture for its mass-circulation readership: "Cabinet sticks to 20 percent" reads its headline. It says the government is willing to scrap unemployment premiums in exchange for the VAT hike.

However, the 'social partners' think that 'they are being offered one of their own cigars', as the Dutch say. They argue that there is an enormous amount of money available to fund unemployment payouts at the moment, all of it already provided by the taxpayer.

"Linking the two things is nonsense. We're saying no to the VAT rise," says a spokesperson.

[Radio Netherlands / Mike Wilcox / Expatica]

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