Opinion: Border effects assessment must be improved

A new year, new tax rules. Sugar tax is driving Dutch consumers across the border, was the gist of reports in De Limburger and others in early 2024. The measure is part of the 2023 Tax Plan and was introduced on 1 January 2024.

This consumption tax on non-alcoholic beverages is not the only cost-increasing measure that has been implemented. Excise duty on alcoholic beverages was also increased from 1 January 2024. Entrepreneurs in the border region are seen as victims of higher taxes and fear that customers will cross the border en masse to get the same product cheaper.


Summary assessment

A classic border effect, is the initial expectation. The finance ministry also admits this in its own impact assessment of the Tax Plan. ‘Border effects will possibly become larger due to the increase in the consumption tax. Currently, the price index of non-alcoholic beverages is already slightly higher in the Netherlands than in Belgium and Germany. The increase may make it more attractive to buy non-alcoholic beverages abroad’.

This is a very cursory assessment rather than a thorough assessment of the extent to which consumers will change their purchasing behaviour. Derived from that comes the question of what the socio-economic effects are for the border region, such as for supermarkets and the location climate. And importantly for policymakers: is the intended goal – namely to encourage healthy behaviour and fill the state treasury – being realised as a result of waterbed effects? There was certainly cause for this last critical reflection, now that the RIVM and CBP opinions contain enough red flags about this.

Flight tax

The discussion is not new. Earlier Cross-border impact studies by expertise centre ITEM in 2017 on the limited increase of the lowest VAT rate from 7 to 9 per cent showed that the expected effect was negligible. Indeed, a couple of years later, it turns out that this did not make people shop more across borders.

Even with an airline tax, we know from studies that several factors play a role in the decision to visit an airport across the border. But this does not yet answer the question of what a (more comprehensive) sugar tax does to consumer behaviour. A good border impact assessment therefore requires more insight than the ministry’s explanation currently reveals. Grade: insufficient.


Since 2021, it is mandatory for ministries to test new or amended policy and legislation for border effects, as a so-called quality requirement. This explicitly aims to identify at an early stage what the consequences for border regions will be before they become reality. Especially with regard to domains where member states are very autonomous and thus different, frictions are to be expected.

An example? Taxation! Finance has been the ‘court supplier’ of border effects for years, of which people are also increasingly aware. So is the House of Representatives, which itself has called for a border effects obligation. It is therefore surprising that both Houses remained silent on the border effects assessment of the sugar tax. This could also be done differently. On the excise duty increase on alcohol, a motion was passed in autumn 2023 asking the government to monitor the border effects. Similar monitoring is already taking place on fuel excise duty, also after insistence by the House.


Data on price differences between countries are available, but their actual effects on consumers and the border-regional economy are insufficiently known. Let this motion now be implemented more broadly by monitoring a broader framework of cost-increasing taxes, i.e. including the sugar tax. This will contribute to a better understanding of border effects to make a next review a lot better.

Pim Mertens is scientific coordinator at Maastricht University’s ITEM expertise centre.

Dagblad De Limburger, 7-2-2024