- The Deputy Minister of Finance justified the abolition of the reduced VAT rate on floriculture, explaining the discrepancy between the government’s estimate (€328 million) and a sector report’s estimate (€159 million) by the CPB’s strict forecasting rules, which exclude behavioral and broader economic effects.
- The policy choice is further supported by an evaluation indicating that while the reduced rate benefits floriculture, it is fiscally inefficient as higher income groups benefit most, and job creation through this instrument is disproportionately expensive (€70,000 to €100,000 per FTE).
- The government anticipates that a significant contraction in the Dutch floriculture sector, similar to Spain’s experience after a 2012 VAT increase, is unlikely because 80% to 85% of Dutch floriculture is exported and will continue to benefit from a zero VAT rate.
Source BTW Jurisprudentie
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