Belgian tax burden under fire
20 November 2007
BRUSSELS – A new World Bank report confirms Belgium’s position as a high tax economy. The survey was carried out by the International Finance Corporation and the auditors PricewaterhouseCoopers. “Paying Taxes in 2008” includes a list of 178 nations.
Low tax economies are ranked at the top, high tax economies further down the list. Belgium comes in 65th place just ahead of Germany (67th place), but far behind Ireland (6th) and the Netherlands (36th).
In the previous report Belgium featured in 19th position.
The people of the Maldives, Singapore and Hong Kong enjoy the lightest tax burden.
Three criteria were taken into account.
Belgium scored poorly when it comes to considering the time it takes to get paperwork in order.
Belgium came in 24th place when the number of payments a company has to make was looked at.
Our country fared worst when the total tax burden was taken into account.
With 44.2 percent of GDP going to tax Belgium was ranked 154th in the world.
The report reveals that the average Belgian company has to hand over 64.3 percent of its profits to the taxman.
This is far higher than the European average of 48 percent.
The report does concede that Belgians get a lot in return for their high tax regime: generous social security payments, an excellent health service and impressive infrastructure.
Frank Dierckx of auditors PricewaterhouseCoopers says that Belgium’s high tax burden is largely due to the fact that the Belgian authorities have not been efficient in lowering taxes.
Even though lower taxes were a priority the overall tax level remained unchanged in 2007 compared with 2006.
Mr Dierckx says that Belgium’s corporation tax should also be cut from 34 percent to 20 percent if the country is to strengthen its competitive edge.
PM Verhofstadt “not amused”
Belgium’s outgoing Premier Guy Verhofstadt (Flemish liberal) is not impressed by the study.
Income tax cuts were one of the main priorities of his two administrations.
He says Belgium is performing much better than the World Bank report suggests.
Mr Verhofstadt criticised the way that the rankings were made using a fictional small business.
The Prime Minister points to numerous other studies that show that Belgium is strengthening its international position and is an attractive country for foreign investors.
[Copyright Flanders news 2007]
Subject: Belgian news