N-VA pledges to slash tax rate

The Flemish nationalist party N-VA announced this week that a tax cut would be incorporated into the party’s manifesto at the party congress early next year. Party president Bart De Wever, also the mayor of Antwerp, said that he wants to cut the average tax rate to 40%, following the next election.

The planned cut would bring down the tax rate for the average worker from about 50%, one of the highest rates in the world. At the same time, the party said it would freeze government expenditure until at least 2016.

The document outlining proposed new legislation was put to the party members for discussion on Monday. “We have to make a break with rising taxation, mounting debts and expanding government,” said De Wever. “The answer to that is called confederalism.”

De Wever explained that his model of confederalism would make taxation the responsibility of the regions, although the federal government would still remain responsible for collecting VAT and customs duties, so that these funds could be used to reduce the national debt.

Flanders would immediately assume responsibility for collecting income tax under this plan and would lower the income tax rate to 40%. The 50% band would not be entirely scrapped – people on extremely high incomes would still pay this rate. The N-VA would also abolish automatic wage indexing and introduce instead wage agreements for each sector settled every two years.

Under De Wever’s plan, the company tax rate would be cut from 40% to 27% – the average rate in Western Europe, according to the N-VA. The party would also limit the payment of full unemployment benefit to two years; the unemployed would then be paid from social security funds. The retirement age would remain fixed at 65, but measures allowing early retirement would be drastically limited.

The party plans to announce its plan for Brussels later today.