The government intends to eliminate the reduced VAT rate for ornamental horticulture products as of 1 January 2028. Erik Stuurbrink, chairman of the sector group Bomen, Vaste Planten en Zomerblomeen (Trees, Perennials and Summer Flowers) of LTO Nederland, questions whether the government is aware of the long-term impact of this measure.

“For the Tax Authorities, tree nursery products also fall under ornamental horticulture products. If the reduced VAT rate is eliminated, as of 1 January 2028,  the general VAT rate of 21% will apply to all our products. That rate already applies to products related to food, such as fruit trees and fruit plants. 21% on all our products: this would make products on average 10–13% more expensive. At the same time, costs on the work floor, such as labour costs, continue to increase. Where will it stop? Will our products become unaffordable? The risk is that you price yourself out of the market. Our concern is not only that consumers will spend less on ornamental horticulture products, but also institutional buyers, in other words governments. Is our government aware of this? On the one hand we are expected to green our environment, but on the other hand fewer trees and plants will be purchased.”

Withdrawal
Stuurbrink therefore calls on the government to withdraw the proposed VAT increase as soon as possible. The question remains where the government will then obtain additional tax revenue, as there are cuts being made everywhere and, for example, funds are needed due to geopolitical tensions.

“Our products must remain under the reduced VAT rate, so that sales are not negatively affected but rather stimulated,” says Stuurbrink. “The value of trees and plants cannot be directly expressed in euros, but in the long term they provide many benefits – such as lower healthcare costs, greater social cohesion, and increased happiness, wellbeing and health.”