“If the government does decide to increase the current low VAT rate of 6% for flowers and plants to the high 21% VAT rate, the export position of the Dutch horticultural sector would suffer a major setback, and lower income groups would no longer be able to afford these products.” This is the opinion of Lucas Vos, CEO of FloraHolland and Director of the Association of Dutch Flower Auctions (VBN).
The potential yield for the government set against the enormous damage that would be caused to the sector and loss of jobs forms a very uneven balance. FloraHolland and the VBN call on the government not to consider raising the VAT rate.
Horticultural products respond very flexibly to prices: the higher the price, the greater the drop in demand, according to research conducted by the Agricultural Economics Institute (LEI) 1. An increase in the VAT rate would be transferred in its entirety to the consumer. The sector's turnover would decrease by at least €240 million according to the VBN's estimate, resulting in a loss of 5,220 directly linked jobs 2.
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