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Dutch PM defends plans to scrap dividend tax

© AFP/File | Dutch Prime Minister Mark Rutte said he had consulted major multinationals including oil and gas giant Shell before scrapping the dividend tax

THE HAGUE (AFP) - 

Dutch Prime Minister Mark Rutte scrambled to calm a brewing storm Friday over the new government's plans to scrap a dividend tax for companies, saying it was needed to retain and promote foreign investment.

Rutte and his four-party coalition government have come under fire from opposition parties for deciding to cancel dividend tax in 2019, which local news reports say will suck at least 1.4 billion euros ($1.6 billion) from the state's coffers.

Both left and right-wing parties have demanded clarification after news reports that big multinationals insisted that The Netherlands, which is heavily reliant on international trade and commerce, slash a tax on dividends from 15 percent to zero.

The plan did not feature in election manifestos of the four parties now forming the ruling coalition, but surfaced after Rutte cobbled together his government consisting of his business-friendly Liberals, the progressive D66 party and two centre-right Christian parties.

"During the government formation we weighed up the issue... and came to the conclusion that The Netherlands... has a huge interest in being an enterprise-friendly country for these big companies to remain or come here," said Rutte.

Some 40 percent of Dutch employees are reliant on jobs provided by the big multinationals, based on a 2015 survey, Rutte said.

"And my job is to work for Dutch jobs. That's my most important assignment," Rutte told reporters at a weekly briefing after his cabinet meeting, explaining the move.

The Dutch premier cited Brexit as one of the most important reasons for The Netherlands to remain an attractive place of business for foreign companies and shareholders.

He said London was implementing a raft of measures to make foreign investment more attractive and lure companies away.

Rutte however admitted he did consult major multinationals on the issue, but declined to name them other than the umbrella business body VNO/NCW and oil and gas giant Shell -- which he said already revealed in public that they had met.

Otherwise "the discussions were confidential," Rutte said.

Opposition leaders however lambasted the move.

Rutte's government "has been blackmailed by big business," Socialist Party leader Emile Roemer told the NOS newscaster on Thursday.

Rutte unveiled his government last month after a record 225 days of negotiations and bargaining following the March elections.

The Netherlands is home to a number of large multinationals including Shell and Unilever, both of which divide their corporate offices between the lowlands country and Britain.

jhe/jkb/ach

© 2017 AFP