Tax revenue projections need to be clearer
There are shortcomings in the way in which the Ministry of Finance estimates future tax revenue
The Dutch House of Representatives would benefit from clear projections of future tax revenue, as well as clearer explanatory notes on these projections. There is not yet enough consistency between the Coalition Agreement and the various government policy documents. For example, it is not always clear, when the government announces new tax plans, whether the government has taken account of behavioural effects in its projections of future tax revenue and, if so, how. For instance, in calculating the revenue generated by a rise in insurance premium tax, has the government taken account of the effect that certain households may become less prone to take out insurance policies? If it did, how has this been done, and how big is the effect assumed to be? In part as a result of these factors, discrepancies may arise between the figures quoted in various government policy documents and tax plans. There is scope for improvement in the reasoning behind this. Once the situation is improved, the members of the House of Representatives will be in a better position to analyse the information on the trend in tax revenue and track the changes step by step.