Salaries of up to €100,000 should be taxed at a rate of 35%, with a new top rate of 45% for higher earners, according to employers’ head Hans de Boer.

‘Income tax needs an overhaul,’ De Boer said. High Dutch taxes and the wide gap between wage costs and take-home pay are dampening demand, the VNO-NCW chairman said.

The tax Dutch system should dovetail more with neighbouring countries and stimulate the economy, he said. ‘This would be good for our competitive position, domestic spending and jobs creation,’ De Boer claims.

De Boer outlined his suggestions in a 10-point plan for improving the Dutch economy.

The current Dutch top tax rate of 52% applies to earnings over €55,000. Not only is the top tax rate high in European terms but the salary threshold is low.

The government is currently working on plans to revise the tax system to cut the amount of money paid back to low income families in the form of housing, healthcare and child benefits.