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Green Party unveils alternative to austerity

11:49 02/04/2013

Belgium’s French-speaking Green party, Ecolo, has unveiled details of its plans to redress public finances, lamenting the federal government’s “blind pursuit” of an austerity policy, writes Tax News’s Ulrika Lomas. As the government prepares to find a further €2.8 billion this year to maintain Belgium’s public deficit target, Ecolo has advocated a series of fiscal initiatives aimed at generating additional revenues for the state while ensuring greater fiscal and social justice in Belgium. The party has suggested revising the system of notional interest, to limit the volume of own funds available and to better support small and medium-sized companies and spending on research and development. Ecolo recommends introducing a simple, modulated tax regime for the taxation of capital gains derived from shares. Under the plans, capital gains would be taxed at various rates depending on the holding period of the shares in the capital of a company “to penalise speculative choices and to encourage stability of investments”. Other proposals include plans to impose a special 70% rate of tax on income from stock options, bonuses, golden handshakes and remuneration in excess of €1 million and to introduce a crisis contribution on wealth exceeding €1.25 million, excluding main residence. Last month, budget minister Olivier Chastel announced that a further fiscal effort of €2.8 billion would be required this year to maintain the public deficit at 2.15% of GDP. The predicted €2.8 billion shortfall is primarily due to flagging economic growth in Belgium as well as an unexpected shortfall of fiscal revenues. At the time, prime minister Elio Di Rupo’s spokesman confirmed that ministers had already begun work aimed at finding solutions to the problem and that technical working groups had been set up. Groups will focus on specific areas, notably fiscal revenues, social security and spending.

Written by The Bulletin