Ministers reach agreement on federal budget

11th October 2005, Comments 0 comments

11 October 2005, BRUSSELS — Top federal government ministers reached a deal at about 5am on Tuesday to bring the 2006 Budget into balance, the 6th balanced budget in succession.

11 October 2005

BRUSSELS — Top federal government ministers reached a deal at about 5am on Tuesday to bring the 2006 Budget into balance, the 6th balanced budget in succession.

Budget Minister Johan vande Lanotte said after the meeting ended that new fiscal measures had been drawn up to earn the Belgian government an extra EUR 400 million.

A 15 percent tax will be charged in future on the surplus value of bonds, yielding the government EUR 200 to 250 million.

Taxes will also be levied on insurance funds, which will earn the treasury an additional EUR 150 million.

These savings and investment packages have until now enjoyed tax-free status. Small investors were taxed, but large investors will also need to pay tax in future.

The new fiscal measures will apply to people who have invested abroad and voluntarily report to the tax office.

They will then be required to pay the necessary tax, but will escape being fined if they report their investments within six months.

Finance Minister Didier Reynders said a fine of 5 percent will be imposed after six months and a 10 percent fine if people report their investments in 12 months time.

For companies that wish to report investments, company tax will apply, while private investors will need to pay 15 percent in tax.

In a pension sweetner, the federal government will boost the tax deductibility rate to stimulate the public to start an additional pension fund.

The regional governments in Wallonia, Flanders and Brussels will need to contribute to the federal budget-balancing act.

The regions will not be allowed to immediately spend VAT or income tax, adding EUR 250 million to the budget.

In additional, Flanders — which is in general more cautious with its budget — will need to contribute a further EUR 150 million.

An inter-governmental budget committee will meet later on Tuesday, at which point it will become clear whether the regions are willing to assist the federal government.

Prime Minister Guy Verhofstadt will include the budget in his policy statement to mark the opening of Federal Parliament on Tuesday afternoon.

[Copyright Expatica News 2005]

Subject: Belgian news

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