Government misses out on 330 million

17 July 2007

BRUSSELS – The outgoing government failed to take action on plans to increase the excise duty on cigarettes, cigars and rolling tobacco effective 1 July. As a result the new government will have to make do without the EUR 330 million in revenue this measure would have yielded.

All tallied up the tax revenue this year will come to EUR 795 million less than counted on in the budget, new half-yearly figures from the finance department indicate. De Tijd reported this on Tuesday.

The Verhofstadt government had decided in the budget negotiations that the excise duty on tobacco would be increased. The taxes on cigars would be raised from 5 to 10 percent, the tax on rolling tobacco from 37.55 to 40.98 percent and that on cigarettes from 57.26 to 60.8 percent.

The cabinet meeting on 27 December 2006 decided that an evaluation would be carried out before the measure came into effect. It was agreed however that the higher taxes would come into effect on 1 July 2007.

“Finance Minister Didier Reynders never made a point of getting it done however,” says a source at the government.

Subject: Belgian news