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Home News Budget: 750 million euros in cuts and new taxes

Budget: 750 million euros in cuts and new taxes

Published on 01/07/2013

The measures agreed should raise 750 million euros this year. The agreement also involves savings worth 2.37 billion euros that will take effect next year.

Budget: 750 million euros in cuts and new taxes

Reaching agreement was no easy matter, but the deal that includes savings of 2.37 billion euros means that the government is already well on the way to finding the extra 3.5 billion euros needed to shore up next year’s budget.

Sixty percent of cash will be raised by cuts that will also be felt at government departments. A further 30% will be generated by new taxes. The cuts include a reduction in the tax benefits enjoyed by Belgian diplomats that will raise 10 million euros this year and 20 million next. The Defence and Foreign Affairs budgets are being cut by 104 million euros this year, while Beliris, the fund that finances projects in Brussels, is losing 10 million euros. The defence and international development budget are being lowered by 125 million euros next year.

Belgium will pay less towards the living wage for foreign nationals saving 60 million euros. The closure of asylum centres raises a further 34 million.

Primary expenditure on social security is being cut by 1.5 billion euros.

Child allowance survives unscathed, but the school grant is being cut 15% this year and next.

A ‘Fairness Tax’ is being introduced to ensure that businesses that pay dividends but no taxes will have to pay a minimum in taxes. The government is funding 50 million euros in wage cost reductions for small businesses.

Duty on DERV or diesel and petrol or gasoline fuel is not being increased. Beer is set to become 6% more expensive, while duty on wine increases 2%.

In future the VAT sales tax will be levied on lawyers’ fees at a rate of 21% putting Belgium in line with most other European countries.

[ / Expatica]