PM’s tax plan wins European praise

4 July 2005

BRUSSELS — Plans from Prime Minister Guy Verhofstadt to shift the burden of tax from income to BTW taxes have been boosted by the findings of a European workgroup.

The group said increasing BTW taxes (VAT in English) to fund a cut in income tax would lead to higher economic growth and employment.

Belgium and Germany would benefit the most by a cut in income tax, newspaper ‘De Tijd’ reported.

Verhofstadt recently proposed shifting the burden of tax from direct to indirect taxation. It was hoped this would lead to a cut in wage costs and an increase in the costs of consumer goods.

But the Francophone Socialist Party (PS) rejected the proposal, arguing that higher taxation on consumer goods will hit low-income earners the hardest.

The European Council then ordered in March a workgroup to investigate the proposal, Flemish broadcaster VRT reported on Monday. The resulting report placed the prime minister’s report in a good light.

[Copyright Expatica News 2005]

Subject: Belgian news