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Belgian revenue rise overshadowed by expenditure

12:10 17/06/2013

The Belgian Debt Agency has published its 2012 annual report, in which it highlights the fact that historically high expenditure levels offset a rise in fiscal revenues last year, writes Tax News’ Ulrika Lomas. According to the Agency, total fiscal revenues rose sharply in 2012, rising by 1.1% to reach 44.7% of GDP. Total primary spending rose by 1.4%, reaching a record high of 51.3% of GDP. The levies-on-labour-income-to-GDP ratio rose again last year. Income derived from corporation tax increased from 3% to 3.4% of GDP in 2012, while levies on other types of income and on wealth were up by 0.3%, standing at 4.1% GDP at the end of last year. The Debt Agency notes that withholding tax rates were harmonised last year for the majority of movable income, rising from 15% to 21%. Furthermore, an additional contribution of 4% was introduced last year, imposed on qualifying moveable income (interest and dividends) exceeding €20,020 annually. Finally, income from taxes on goods and services in Belgium showed a slight increase last year, with recorded growth of 0.3% of GDP. The Agency maintains that a large part of the rise is due to the nuclear tax payment. The increase is also attributable to the fact that the VAT exemption accorded to certain notary and bailiff services was abolished, and to the television fee increase. A rise in the excise duty on tobacco also contributed to revenue growth, the Agency said. Following its own recent analysis of the State Budget execution, Belgium's Monitoring Committee announced that a further fiscal effort of €524m will be needed this year, to enable the Government to meet its 2.5% deficit target in 2013. A further effort of €3.5bn will be required in 2014.

Written by The Bulletin