Belgium presents ‘lacklustre’ budget for 2014

Belgian finance minister Koen Geens has unveiled details of the country's draft 2014 Budget, designed notably to reduce the cost of labour and to increase spending power, writes Tax News’ Ulrika Lomas. The 2014 finance bill provides for a raft of fiscal stimulus measures totalling around €151m, and provides for expenditure savings of approximately €560m next year. Generating additional revenues for the state, the draft budget abolishes the excise duty exemption currently benefiting biofuels in Belgium. Implemented at the request of the European Union, the measure is expected to result in savings of around €118m. Furthermore, the draft legislation provides for additional revenues of €25m in 2014 from tax regularisation. In addition, the government anticipates new income of around €109m from efforts aimed at optimising the working methods of the Belgian finance ministry. This includes the issuance and use of pre-completed tax declarations, increased computerisation, and improved tax compliance.

The government's fiscal stimulus package includes plans to reintroduce the tax deduction for investment accorded to small- and medium-sized companies (SMEs) in Belgium, for a period of two years initially, although with the possibility of extending the measure. Furthermore, the package provides for a reduction in fiscal charges for SMEs electing to recruit a fourth and fifth member of staff. SMEs already benefit from tax relief for the recruitment of their first three employees. Finally, the government plans to reduce charges for overtime hours in the hotel and catering sector and in the construction industry. For example, the government intends to increase the number of overtime hours qualifying for wage withholding tax exemption, from 130 hours currently to 180 hours next year. The budget provides for a structural deficit of 1.2% in 2014.