What did you do in this research?

In the Netherlands, there is a differentiated VAT rate. The basic principle is that all goods and services fall under the general rate of 21%. The reduced rate of 9% is the exception to this. The rate of 9% applies to products such as food, water, ornamental horticulture, and medicines and medical aids. We researched for the Ministry of Finance whether the reduced VAT rate helps to achieve the set goals and whether this is done in the most efficient way.

What made this research interesting for you?

The social and broad impact of the reduced VAT rate. In 2023, there was a benefit of 13.4 billion euros associated with the reduced VAT rate. It affects various sectors from the food industry to the cultural sector, the pharmaceutical industry, and hairdressers.

What were the challenges in the research?

The reduced VAT rate was introduced in 1969, coinciding with the introduction of the VAT system. The aim of the reduced VAT rate at that time was to alleviate the burden of turnover tax for those with lower income. In the following years, the products covered by the reduced VAT rate changed, as did the goals of the reduced VAT rate.

In the research, we found that historical data was not always available enough to measure the effects properly. The changing products and goals also meant that a very extensive study was necessary. Each product group covered by the reduced VAT rate has its own goals and nuances.

What did you learn from this research?

Firstly, how complex the reduced VAT rate and its associated goals are. It is always fascinating to see how complex fiscal rules we have in the Netherlands. Furthermore, it was interesting to see the interests involved in the reduced VAT rate and how much effort different sectors made to convince us of the importance and relevance of the reduced VAT rate for their sector.

Why could Dialogic specifically provide answers to these questions?

By combining qualitative and quantitative research methods, we were able to answer the research questions in a structured and thorough manner. What aided this is that we had conducted research on fiscal and economic regulations before and that we are also capable of quickly grasping complex subjects.

How was the research received?

Our client was satisfied with the research. We also gave a separate presentation to some members of the Dutch Parliament where they could ask in-depth questions about our research. Additionally, the research received quite a bit of attention in the media, such as from the NOS.