With just one day to go before a key vote on tax reforms, ministers have not yet forged a deal with opposition parties to ensure the plans pass in the senate.
Last week it appeared as if the finance ministry had agreed to lower the tax paid by traditional families with one breadwinner to appease the Christian parties and win their support.
However, MPs from the ruling VVD and PvdA oppose what they call the ‘kitchen sink subsidy’ for stay-at-home women and it is still unclear if the proposal can count on enough votes to pass in the senate.
Other opposition parties are also making demands in return for their votes in the upper house, where the ruling coalition is far short of a majority.
The Liberal democratic party D66 and left-wing greens GroenLinks say they want more to be done to support the environment using tax measures and the Socialists want an extra tax on millionaires.
The VVD’s parliamentary leader Halbe Zijlstra said during Tuesday’s debate that he cannot believe parliament will scupper plans to cut income tax by €5bn by failing to reach an agreement.
In total, the government plans to cut taxes and premiums by €5bn. This will be done by making changes to the tax free allowances and tax bands so that, for example, the top rate of 52% kicks in on income over €66,421.
The second stage of the reforms, which will require agreement from coalition parties to ensure it passes through the upper house of parliament, involves increasing the 6% value-added tax (btw) rate to the higher rate of 21% on some products and services. Small firms and retailers have already condemned this proposal.
The third stage, which still has to be worked out in detail, will involve giving local authorities more tax raising powers in return for further cuts in national taxes.
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