Brussels, 23/07/2015 (Agence Europe) - On Thursday 23 July, the Belgian government presented a raft of measures aiming to boost corporate competitiveness, by shifting the tax burden on employment to consumption and other income taxes.
“Reducing the cost of work from 33% to 25% will be the key measure of this tax shift to boost employment”, said the finance minister, Johan Van Overtveldt, reports la Libre Belgique (our translation). “There has been a shift between the burdens on work, which we are going to reduce, and the indirect taxation on consumption, which can also have an environmental impact”, Deputy Prime Minister Didier Reynders commented.
This tax shift, which has been estimated to be worth in excess of €7.2 billion between now and 2018, is based on four pillars: income not related to employment (37%), 'green' taxation (27%), more efficient State functioning (18%) and consumption (17%).
To promote the competitiveness of businesses by reducing the salary gap with the neighbour countries, employers' social contributions on salaries will fall from 33% to 25%. The amount of €430 million will be allocated for the development of small and medium-sized enterprises. This is good news for purchasing power, as low and medium earners are promised an extra €100 a month from 2016.
In order to pay for these measures, the taxation on legal constructions abroad will be increased, anew regime will apply to property companies and a tax on speculation targeting shares held for less than six months will be brought in. As regards indirect taxation, VAT on electricity will increase from 6% to 21% from 1 September 2015 and excise duty on diesel, alcohol and tobacco will also be increased. (Mathieu Bion)