Calculating the effects of increasing the VAT on ornamental plant products in the Netherlands and the EU: Update for the situation in 2023

Research output: Book/ReportReportProfessional

Abstract

Ornamental horticultural products are taxed at a reduced VAT rate in the Netherlands (9% rather than 21%) as well as in 14 other EU countries. Increasing VAT would have a negative impact on turnover and employment in the supply chain. These calculations show that a VAT increase in the Netherlands would lead to a loss of around €200 million in turnover in the ornamentals sector at wholesale prices (-1.6%). If VAT were to be increased in other EU countries too, this would have a particularly significant impact on the Netherlands’ exports and thus on primary production. In this scenario, the drop in turnover for the ornamentals sector (at wholesale prices) would be €930 million (-7%). The expected impact on the government’s VAT revenue would be partly offset by fewer flowers and plants being bought, and in the shorter term by a decline in tax receipts and social insurance premiums from businesses and employees, along with an increase in unemployment benefits being paid out.
Original languageEnglish
Place of PublicationWageningen
PublisherWageningen Economic Research
Number of pages29
ISBN (Electronic)9789464478792
DOIs
Publication statusPublished - Sept 2023

Publication series

NameReport / Wageningen Economic Research
No.2023-120ENG

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