Finance Minister Van Peteghem: ‘You can not solve the public deficit through taxation’

Minister of Finance Vincent Van Peteghem (CD&V) launches his tax reform. The rates of earned income fall by 5 percentage points, the withholding tax falls to 25 percent, and the VAT rate on fruits and vegetables becomes zero percent. “Thanks to this package, Belgium will no longer be the West’s tax master,” Van Peteghem said.

Vincent Van Peteghem (CD&V) calls his proposal for a tax reform a plan. There are no decisions yet. The document refers to a ten-year course. The Belgian national will therefore have to be patient. ‘Will this package be realized by the end of the Legislative Assembly? No ‘, explains Van Peteghem. ‘This package contains many proposals that can only be discussed during government negotiations.’ Nevertheless, the Minister still wants to put a number of proposals on the government table in the current election period. However, he does not want to give details about that.

Labor

Van Peteghem will have worked to pay again. The package allows for a significant reduction in taxes on labor. The tax-free amount increases from 9,270 to 13,390 euros, the level of the living wage for a single person. (see table below) . Interest rates in most income groups fall by 5 percentage points. The top rate of 50 percent remains, but so for revenues from 84,740 euros per year. That level is twice as high as the most heavily taxed income group today, namely income from EUR 42,370. Van Peteghem: ‘To give you an idea: Today, 1.2 million Belgians pay the highest rate of 50 percent. In my proposal, there are still 175,000. ‘

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The marriage quotient is extinguished, the crisis tax is changed and the work bonus is extended to the median salary. Tax benefit for eco, sports and culture coupons disappears. ‘It should ensure that more wages are paid in euros.’ Food vouchers are the start of the dance. ‘Meal coupons are a reference point for many families. We are not touching that, “said Van Peteghem.

Van Peteghem is also not tinkering with the current greener tax scheme for company cars. However, he disconnects the tank card from the company car: private trips with company cars are taxed. “For example, we can work there with a lump sum or make a calculation based on the distance between home and work,” says Van Peteghem, who prefers to keep such surgical details for later. “What counts here is the direction that our personal income tax should go. Thanks to this package, Belgium will no longer be the West’s treasurer. ‘

Property income

The withholding tax on interest, dividends and other capital income falls from 30 to 25 percent. To spare the small saver or investor, the first 6,000 euros in capital income are excluded. Striking is the tax of 15 percent on realized capital gains on shares, bonds and other financial products. ‘We take the course losses into account.’ The annual fee on securities accounts and the fee on stock exchange trades then disappear again.

From now on, the actual rental income is taxed at 25 per cent. Rental income is capital income, and therefore also entitles to the exemption of 6,000 euros. Landlords can benefit from a fixed expense deduction of 30 percent of actual rental income. Those who have more costs can prove it. The package is intended to support owners who want to insulate or renovate their rental property. The document also states that ‘the tax benefit for non-owner-occupied housing will disappear.’ A private individual who sells such a non-owner-occupied home pays a capital gains tax of 15 per cent. ‘Capital losses are deductible on taxable capital gains.’

Spending

The reduced VAT rates of 6 and 12 percent have been harmonized to 9 percent. The normal VAT rate remains stable at 21 percent. The rate of vegetables, fruits and medicines will go to 0 percent, as will the rate of diapers, sanitary napkins and other hygienic products.

The VAT reform must also serve Europe’s climate ambition to reduce CO2 emissions by 55 percent by 2030. The vast majority of Belgian houses and apartments are not ready for that ambition. Therefore, Van Peteghem extends the reduced VAT rate for demolition and reconstruction of the owner-occupied home. The package also supports the European proposal on petroleum tax and international efforts to collect VAT on airline tickets.

The invoice

Van Peteghem does not know whether taxpayers will ultimately be the winner or the victim of this reform. ‘We take repayment effects into account. This tax relief will create many jobs. But will this reform be budget neutral? This package alone will not bring you there. For a structurally sound budget, you need a comprehensive package that goes beyond fiscal reform. Then one must also look at a reform of pensions and the labor market, and think about the core tasks of the government. You can not solve the public deficit through taxation ‘, the minister concludes.

Vincent Van Peteghem (CD&V) calls his proposal for a tax reform a plan. There are no decisions yet. The document talks about a ten-year course. The Belgian national will therefore have to be patient. ‘Will this package be realized by the end of the Legislative Assembly? No ‘, explains Van Peteghem. ‘This package contains many proposals that can only be discussed during government negotiations.’ Nevertheless, the Minister still wants to put a number of proposals on the government table in the current election period. However, he does not want to give details about that. Van Peteghem will have worked to pay again. The package allows for a significant reduction in taxes on labor. The tax-free amount increases from 9,270 to 13,390 euros, the level of the living wage for a single person. (see table below). Interest rates in most income groups fall by 5 percentage points. The top rate of 50 percent remains, but so for revenues from 84,740 euros per year. That level is twice as high as the most heavily taxed income group today, namely income from EUR 42,370. Van Peteghem: ‘To give you an idea: Today, 1.2 million Belgians pay the highest rate of 50 percent. In my proposal, there are still 175,000. »The marriage quotient has been switched off, the crisis tax has been changed and the work bonus has been extended to the median salary. Tax benefit for eco, sports and culture coupons disappears. ‘It should ensure that more wages are paid in euros.’ Food vouchers are the start of the dance. ‘Meal coupons are a reference point for many families. We do not touch that, “says Van Peteghem. Van Peteghem also does not change the current greener tax scheme for company cars. However, he interrupts the tank card from the company car: private trips with company cars are taxed.” For example, we can work there with a lump sum or make a calculation based on the distance between home and work, “says Van Peteghem, who prefers to keep such details of operations for later.” What counts here is the direction in which our personal income tax should go. Thanks to this package, Belgium will no longer be the West The withholding tax on interest, dividends and other capital income falls from 30 to 25 percent. To spare the small saver or investor, the first 6,000 euros in capital income are excluded. Strikingly, the tax of 15 percent on realized capital gains on shares, bonds and other financial products. ‘We take the capital losses into account.’ From now on, the actual rental income is taxed at 25 percent. Rent income is capital income, and therefore also entitles to the exemption of 6,000 euros. Landlords can benefit from a fixed expense deduction of 30 percent of the actual rental income.Those who have multiple costs can prove it.The package aims to support owners who want to insulate or renovate their rental property.The document also states that ‘the tax benefit for the non-owner-occupied dwelling disappears.’ A private individual who sells such a non-owner-occupied home pays a capital gains tax of 15 per cent. “Capital losses are deductible on taxable capital gains.” The reduced VAT rates of 6 and 12 per cent are harmonized to 9 per cent. The normal VAT rate remains stable at 21 per cent. on vegetables, fruit and medicines will go to 0 percent, just as the rate for diapers, sanitary napkins and other hygiene products.The VAT reform must also serve the European climate ambition to reduce CO2 emissions by 55 percent by 2030. The vast majority of Belgian houses and apartments are Van Peteghem is therefore not ready for that ambition. end will be the winner or the victim of this reform. ‘We take into account repayment effects.This p cat relief will create many jobs. But will this reform be budget neutral? You will not get there with this package alone. For a structurally sound budget, you need a comprehensive package that goes beyond fiscal reform. Then one must also look at a reform of pensions and the labor market, and think about the core tasks of the government. The public deficit cannot be solved through taxation ‘, the minister concludes.

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