THE HAGUE, 12/10/06 - The cabinet has not reduced tax pressure on Dutch businesses, but actually raised it. On balance, the burden of taxes on companies has increased by 200 million euros in the past four years, it emerges from an economic affairs ministry dossier.

Only last week, Finance Minister Gerrit Zalm reported that the administrative burden for companies had come down by 25 percent in the past cabinet period. The cut in corporate profits tax to 25.5 percent (as of 1 January 2007) was also presented as a substantial reduction of the burden.

But even including the cut in corporate tax, costs for companies have gone up by 200 million euros over the 2004-2007 period, Nederlands Dagblad reported yesterday. The newspaper based its report on a confidential dossier that it obtained via recourse to the Administrative Disclosure Act (WOB). Nederlands Dagblad added that consumers did benefit in the same period, to the tune of about 1.3 billion euros.

Employers organisation VNO-NCW reacted with surprise to the figures. "It has never been presented like this by the cabinet," a spokesman exclaimed. VNO-NCW blames the increase in the costs burden mainly on the sharply increased employer's contribution to healthcare. "Something must be done about this now."

MKB, the sector organisation for small and medium-sized companies, sees its view confirmed. "We were already saying with the first cut in corporate profit tax in 2005 that it would yield nothing on balance," said spokesman Joep Rats. "The latest cut will not make up for the earlier increase in the burden of taxes."