NETHERLANDS - The Dutch government has backtracked on its initial plan to limit the fiscal support for the build-up of a pension on incomes of over €185,000.

Instead, the cabinet will come up with a new tax bill for high earners, which will leave the tax-friendly regime for pension contributions intact, finance secretary Jan Kees de Jager has indicated in a letter to the Senate - giving in to an earlier motion in the House of Commons from the Christian Democrat party CDA.

This new bill, which is expected to be tabled early next year, will target ‘excessive' remuneration, as well as large (untaxed) pension top-ups for high earners just before they retire or at the start of an employment, the State Secretary made clear.

The umbrella organisations of pension funds and insurers had criticised the cabinet plan as they argued "the tax income it will generate now, will actually be needed to cover the future costs of population ageing".

In their opinion, the plan also was an extra and expensive measure for all pension providers, and running counter to the promised reduction of red tape.

Earlier this week, the Senate voted in favour of a private member's bill - tabled by CDA MP Ria Vedder - to find alternative coverage for the costs of tax-friendly saving for a pension with banks.

The lower government chamber had initially supported a government proposal to partly finance this new facility by reducing the tax support of deferred annuities for self-employed, from almost €151,000 to €103,000.

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