Tax laws

New tax laws make system even more complicated, inspector says

The Cabinet must take into account that the measures bundled in next year’s tax plan will complicate the tax system for citizens. “Implementation will also become more vulnerable to future adjustments,” warns the new Inspectorate of Taxes, Benefits and Customs (IBTD).

“We believe it is important in these situations that citizens and businesses can properly implement the new measures. This increases the effectiveness of the measures and can also help restore confidence in government,” the IBTD wrote in a letter to Finance Minister Sigrid Kaag. The letter accompanied a report done over the summer looking at some specific government tax proposals.

The Ministry of Finance has carefully examined the comprehensibility for citizens and the feasibility of the four measures of the tax plan examined. In addition, there was transparent communication about this, which is a compliment to the Inspectorate.

However, the Inspectorate notes that tax proposals often consist of measures that are additions or exceptions added to existing laws and regulations. This happens even though the system is already too complicated for many citizens. Although all measures were tested for feasibility and understandability for citizens, this was done by evaluating each individual measure independently of all other requirements. They have not been evaluated in conjunction with other rules and regulations.

Simplifying the tax and benefit system, an important objective of this Cabinet, will also only become more difficult if the system becomes even more complex. In the future, the Ministry of Finance will therefore have to consider the consequences of the measures on the complexity of the whole system.

Kaag said the Cabinet planned to “study the report carefully.” She told the Tweede Kamer that the Cabinet intended to respond to the report by November 7 at the latest.