The State Secretary of Finance has sent the memorandum of reply on the 2015 Tax Plan Bill to the Senate. Two key issues addressed in the memorandum of reply are the review of the tax system and the future of self-administered pension provisions.
The government believes that a comprehensive tax review is necessary. One of the main objectives of this review is to reduce the burden on labour. The government is seeking political and social support for the choices to be made during the review. For the system review, the government has two objectives: simplification and stimulation of employment and economic growth. Sustainability has not been chosen as the main objective, because sustainability does not necessarily require a tax solution. Sustainability does form part of the system review as long as it contributes to the government's objectives. Furthermore, the government has previously announced that it will look for alternatives to the existing capital gains tax. In that light, it is investigating how other countries tax capital income.
Regarding alternatives to self-administered pensions, it was asked why a retirement reserve would be introduced for the director and principal shareholder, while the fiscal retirement reserve in the profit sphere in income tax is criticised. Another question from the Senate is whether it would not be wiser to abolish the self-administered pension option and replace it with a generic rate reduction. The State Secretary has promised to send a letter with a more detailed elaboration of the retirement reserve and a variant of a defined contribution scheme with a fixed interest rate to both Houses in any case before the May recess. This will be followed by a debate with the chambers. Should this show that there is broad support for abolishing self-administered pensions, the State Secretary is willing to further explore the possibilities.