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Tax reform: "vigorous reduction" of labor charges - Economic Policy

Tax reform: “vigorous reduction” of labor charges – Economic Policy

The Minister of Finance, Vincent Van Peteghem, launches his blueprint for a tax reform, so that “Belgium is no longer the champion of the tax burden on work”.

The blueprint proposed by Vincent Van Peteghem greatly reduces the workload. The increase in the tax-exempt portion, the reform of the tariff structure, the reduction of the CSSS and the extension of the employment bonus will make work much more attractive. “By removing many tax benefits, at least one in four codes on the tax sheet will also disappear.”

The Minister opts for a tax model compatible with a ‘dual income tax’. Work and replacement income remain subject to progressive tax. But he also chooses “to subject all income from assets to proportional rates. Not thoughtlessly, but taking into account possible costs and capital losses and respecting acquired rights. In this way, we ensure a balanced treatment and fair share of all income from assets, and we achieve a fair balance in the treatment of income from work and wealth“.

A tax-free basis is provided for earned income and replacement income as well as income from assets and consumption.

  • PIncrease intax-exempt portion under personal income tax. This tax-exempt portion goes from 9,270 euros to €13,390, ie the level of integration income for a single person. We also provide a tax-exempt portion of 6,000 euros per year for those who do extra work alongside their usual job.
  • As part of income from assets, a general exemption annual €6,000 via the tax return is granted. By exempting part of the income from savings, placements and investments, the Minister wants to ensure that the small saver or the small investor is not affected and that everyone can build up a heritage.
  • Maximum access to healthy food, medical care, essential hygiene products and public transport, with a lower VAT rate at 0% for fruit and vegetables, medicines, nappies and other intimate hygiene protection products, and the transport of people organized or subsidized by the public authorities.

The full text of the tax reform blueprint is available here.

The blueprint proposed by Vincent Van Peteghem greatly reduces the workload. The increase in the tax-exempt portion, the reform of the tariff structure, the reduction of the CSSS and the extension of the employment bonus will make work much more attractive. “By removing many tax benefits, at least one in four codes on the tax sheet will also disappear.” The Minister opts for a tax model compatible with a ‘dual income tax’. Work and replacement income remain subject to progressive tax. But he also chooses “to subject all income from assets to proportional rates. Not thoughtlessly, but taking into account possible costs and capital losses and respecting acquired rights. In this way, we ensure a balanced treatment and of all income from assets, and we obtain a fair balance in the treatment of income from work and income from assets”. consumption. The full text of the tax reform blueprint is available here.

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