Will the ‘comprehensive tax reform’ become more than an empty box?


To devise a new tax shift from labor to other sources: Minister of Finance Vincent Van Peteghem wants to realize this assignment faster than 2024. The crusty liberal reactions to a carbon tax and vetoes of all kinds already make you fear that he will end up in the decor.

Climate Minister Zakia Khattabi (Ecolo) has not missed her entrance. One newspaper article about one sentence from her policy document – that she wants to quickly work on a carbon tax on fossil fuels – was enough to set the tent on fire. “The green tax tsunami is already under construction,” was the verdict of the N-VA, which clearly opted for a nuance-free opposition, especially against the liberals. In the case of Open VLD and MR, the party chairmen were soon forced to break through the image of ‘peace and quiet’ in the Vivaldi household during this legislature. ‘We are not going to introduce ill-considered and one-sided initiatives on a federal level. Nobody committed to anything in that area in the coalition agreement, ‘Egbert Lachaert tweeted on Tuesday.

It depends on how you look at it. If you include the policy letter from Minister of Finance Vincent Van Peteghem (CD&V), you will immediately see that such a carbon tax is indeed an important option in the context of the broad fiscal reform that the Christian Democrat must invent according to the coalition agreement.

‘I will have taxation studied to make it more climate-friendly. We start from the principle that the polluter pays, whereby we want to discourage the use of fossil fuels as much as possible by introducing a fiscally controlling instrument. We are looking at how we can achieve this via price signals. In principle, this should be a budget-neutral instrument, whereby income is returned to the population and companies. That will be embedded in the broader tax reform mentioned above ‘, it reads literally.

The fact that Zakia Khattabi’s carbon tax is in the news a week after the securities tax is very annoying for the liberals.

Of course the liberals know that that is the intention. Van Peteghem is not the person to immediately color outside the lines. The idea of ​​a CO2 tax is also not new at all. The previous federal and Flemish governments were already working on that track, making electricity cheaper and fossil fuels more expensive. But there is clearly nervousness in the blue ranks.

The fact that the carbon tax is in the news barely a week after the new securities tax – a pure wealth tax – is very annoying for the liberals. Lachaert had strongly resisted this summer when it appeared that N-VA and PS were on the track of a repair of the securities tax. The line of communication among the liberals is now that they have swallowed the securities tax because the proceeds go to health care – which, incidentally, is not entirely correct, because the money flows to social security as a whole – and that will remain so this legislature.

In an interview with De Standaard, Deputy Prime Minister Vincent Van Quickenborne (Open VLD) stated it strongly: ‘There was great unanimity to quickly take the plunge. And this is it: There will be no new wealth tax, no capital gains tax, no capital gains tax – contrary to the N-VA’s plans. Rental income will remain untaxed, there will be no asset register and we will stay away from company cars. ‘

Socialists not happy

That interview did not go down well with the socialists. In any case, the PS and the sp.a are not very happy with the surprisingly fast meeting between Van Peteghem and Prime Minister Alexander De Croo (Open VLD) about the new securities tax. According to the socialists, it cannot be ruled out that the tax will again be overturned by the Constitutional Court, after which nothing remains of their demand to have the strong shoulders contribute.

After the interview of Van Quickenborne, the question is also asked what is left to undertake a major tax reform. Because in order to reduce the burden on labor and to make taxation simpler, greener and above all fairer – which are the most important objectives according to the coalition agreement – the tax base must be broadened. And gradually the path becomes very narrow, when it is littered with vetos and taboos.

If the government wants to work on a shift of that size again with more stability, it must look at the large items.

Let us consider the tax shift implemented by the Michel government and on which the De Croo government wants to build further: that involved a shift of 7 billion euros. At least that was the plan, but the revenues did not follow, so the budget went off the rails. If the government wants to work again on a shift of that size with more stability, it must look at the large items. In a report issued by the High Council of Finance this year, all possible interventions that can take place in the context of an operation ‘simplification and justice’ are listed – with the expected benefits. It concerns more than 100 posts, many of which are very small.

5.6 billion in taboos

If there is no question of taxing the actual rental income, the capital gain on shares and the actual benefit from salary cars, 3 billion euros will already disappear from the pot. If a carbon tax also proves to be problematic within the coalition, the fiscal space that cannot be deferred will already rise to 5.6 billion. Is there anything left? Yes, but these are mainly very painful issues, which are more likely to lead to a redistribution among workers than between rich and less wealthy.

For example, the abolition of the flat-rate professional expense allowance for employees could yield 6 billion euros. However, for most white-collar workers that would mean impoverishment. The abolition of meal and service vouchers (together 1 billion) may be a simplification, but it may have harmful consequences. The abolition of the favorable regime on pension savings (570 million), the marriage quotient (584 million) or the tax benefit on the owner’s home (2.4 billion) are matters that are extremely painful for the CD&V – the party of the competent minister. .

For the liberals, Van Peteghem should not make it difficult at all: delivering a study by 2024 is enough. “There is now mainly a need for fiscal peace,” Prime Minister De Croo said in this newspaper a month ago. Read: the liberals may want to let go of their taboos, but not this legislature.


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