The Netherlands plans a new tax surcharge, with the money going to defense

The incoming Dutch government plans to introduce an additional surcharge on income tax and corporate tax in order to raise approximately €5 billion per year to increase defense spending. The new coalition thus wants to fulfill its commitments to NATO.

By 2030, it wants to increase defense spending to 2.8 percent of GDP and to 3.5 percent by 2035, which is a significant increase from the current two percent.

The planned annual increase in defense spending of €19 billion is to be financed by a combination of tax increases and budget cuts, including in the areas of health and social care. The government refers to the new levy as a "freedom tax."

The coalition agreement presented after the October elections also includes investments in housing and a commitment to limit the public finance deficit to around two percent of gross domestic product.

The leader of the new government will be 38-year-old Rob Jetten of the pro-European D66 party, who will be the youngest prime minister in Dutch history. The coalition of D66, conservative Christian Democrats, and the right-wing VVD party will form a minority government with 66 of the 150 seats in the lower house of parliament.

It will therefore have to seek support for its proposals from the opposition, which is pushing for more environmentally friendly and socially oriented policies.

(reuters, max)