Heinen defends Dutch wealth-tax overhaul despite projected budget cost

The Dutch VVD says a proposed overhaul of the country’s tax on income from savings and investments is adequately funded, despite a projected shortfall of up to €17.6 billion between 2031 and 2040.

VVD MP Wendy van Eijk argued during a parliamentary debate that the plan was covered both during the current government’s term and in the longer run. Figures released by the Finance Ministry, as reported by ANP, show that the expected tax revenue lost under the changes is almost €22 billion through 2040. Most of the shortfall during the government’s expected term is covered, but not all of it; no solution has been identified for the gap in 2031–40.

After opposition MPs pressed her on the funding plan put forward by Finance Minister Eelco Heinen, Van Eijk acknowledged that it did not provide full long-term cover. She said she did not regard that as a problem.

The CDA is also prepared to proceed, though it is more critical of the funding. MP Inge van Dijk said she saw no alternative likely to win majority support and wanted the bill to move forward rather than leave the issue unresolved for years.

A parliamentary majority recently backed a proposal to raise some of the money through inheritance and gift tax by making paper gifts less advantageous. The VVD opposed that measure, so it was not included in the funding plan.

Update

Dutch Finance Minister Eelco Heinen has defended a revised plan for taxing income from savings and investments, arguing that it could prevent a larger budget shortfall. The government’s own figures nevertheless project a substantial cost from the package through 2040.

During a parliamentary debate on Tuesday, Heinen said the earlier proposal lacked support in the Senate. If it had been rejected and the current system had remained in place, he said, deficits could have reached as much as €26 billion by 2040.

Support for the earlier bill was uncertain, with coalition parties VVD and CDA expressing doubts. But the Senate had not debated it when Heinen announced the revision, ANP reported.

The precise basis of Heinen’s €26 billion figure is unclear, including whether it covers one year or several. It therefore cannot be directly compared with the estimated cost of the revised package.

A government table published on 3 November projects that the package would worsen the budget balance by a total of about €17.5 billion over 2026–2040, according to a sum of its annual figures. Almost €17.4 billion of that falls in 2032–2040.

The table also shows a roughly €21.8 billion deterioration from replacing the earlier proposal with a capital gains tax. That is separate from the package total, which includes other measures, such as changes to taxes on substantial company shareholdings.