A tax dispute has shaken the governing coalition in the Netherlands and put Prime Minister Rob Jetten’s minority cabinet at risk of losing support in parliament. The People’s Party for Freedom and Democracy (VVD) has warned its coalition partners that it will not accept support for tax changes proposed by the opposition, NU.nl reports.
The conflict erupted during the eight-hour debate on the 2027 tax package, which ended at around 00:40 local time on Thursday. VVD is part of the governing coalition together with D66 and CDA, but the three parties do not have a majority and must seek support from the opposition to pass the budget and related legislation.
Opposition proposes lower taxes on labour
Progressive Netherlands (PRO) and the pro-European Volt movement have jointly submitted a proposal to reduce taxes on labour by €1.5 billion. The two parties want the cost to be offset through higher taxation of income from large fortunes and by closing tax loopholes related to gifts and inheritances.
The plan also includes a higher rate for entrepreneurs under the box 2 regime, as well as a top rate on returns from assets above a certain threshold. According to PRO’s calculations, the measures would mainly affect people with assets worth around €1.3 million or more. Together with the changes to gifts and inheritances, the proposal is intended to provide the funds for reducing taxes on labour.
PRO leader Jesse Klaver called the initiative a “millionaires’ tax” and presented it as an attempt to shift the burden from working people to the wealthiest. According to him, the proposal is a compromise because it reverses only part of the planned tax increase for ordinary citizens.
VVD refuses support, vote scheduled for 12 November
VVD remains firmly opposed to the proposed changes. The party is insisting on a different approach to the tax package and does not accept higher taxation of capital as a condition for support from PRO and Volt.
“If this fails, we will be left without a tax plan and without a cabinet. Then there will be new elections,” Klaver said during the debate. He accused VVD of forcing the coalition and the government to choose between its position and political deadlock.
The tension puts D66 and CDA before a difficult choice. Supporting the amendments proposed by PRO and Volt could provide the necessary majority, but would at the same time deepen the rift with VVD. Refusing such support would leave the cabinet without a secure majority in either chamber of parliament.
The vote in the lower house is scheduled for 12 November. The tax package must then also be considered by the Senate, where the government likewise has no majority. Before the final vote, the coalition parties will have to decide whether to maintain their common position or allow separate votes on the key amendments.
Sources: dagblad010.nl, nltimes.nl, nlnow.nl