DNB: € 5 billion available for tax reform – Financieele Dagblad (Registration)

For a tax, the next few years some € 5 billion in lubricating oil to be unlocked. Job Swank says director of the Nederlandsche Bank. Swank presented Monday to the latest forecasts for the Dutch economy. Who have for years looked so rosy.

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Omdat facilitate government budget deficits are expected to shrink significantly, according to Swank’s financial leeway a tax reform. DNB for this year foresees a budget deficit of 1.6% of GDP, which is shrinking to 0.9% next year and goes to 0.6% in 2017. According to Swank carry lower unemployment benefits, more tax revenue, lower interest rates and lower pension costs to the deficit reduction

” That gives room for the apparently necessary lubricant to introduce such a revision, “says Swank. “I’ve been in The Hague asked why the lubricating oil is actually needed, but that seems to be so. Then I may hope that this money will be used to further improve the structure of the economy. ” Swank as an example of a possible good step towards harmonizing the current two VAT rates more.

European Commission

He supposes that the European Commission will not object to the Netherlands because of a tax reform to further reduce the temporize budget deficits. According to Swank Brussels will almost certainly qualify as such a reform “structural improvement in the economy” and for that reason the green light.

According to DNB, the economy is growing this and the next two years at a rate that is above the so-called potential growth. That means it can be used about half of the unused capacity. For this year, 2.0% growth is expected for 2016 and 1.8% 2017 2.2%.

That growth next year is expected to fall back slightly is the result of government policy. This year, residential investment would – new construction and renovation – grow at an unprecedented hefty 17.3%. According to DNB, which is partly due to the still working on the ability to pay tax of up to € 100,000. Late last year the scheme has been terminated and just in the last months of the year there is plenty used it. Much of this money is invested in homes. Also, residential investment increased because of renovations fall temporarily in the lower VAT rate. Next year the growth in residential investment is already back to 2.7%.

Swank notes that the Netherlands after the crisis years behind. However, unemployment is falling more slowly, but the labor market, according to Swank in periods of recovery ‘always lags. This year the level of gross domestic product returned to 2008 levels, before the crisis. The recovery in consumer spending is still there according to Swank in behind, which this year are back at 2005 levels.