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Tax Reform in Belgium


  • David Carey


Belgium has a heavy tax burden which has mainly fallen on labour as international tax competition has limited the scope to which this burden could be imposed on capital. This has raised concerns about possible adverse labour market impacts from such high tax rates. In view of these concerns, the government has made substantial cuts in employers’ social security contributions, has reduced employees’ social security contributions and, in the context of a personal income tax reform, has introduced an earned income tax credit. All of these measures have been focused on low-income earners, maximising their favourable labour-market effects by increasing the likelihood that they produce lasting reductions in labour costs and/or reductions in benefit replacement rates. Further reductions in labourincome taxation targeted on low-income earners should be made as budget room becomes available. Narrowing the range of goods and services that are not subject to VAT would help to make more budget ... La reforme fiscale En Belgique, la charge fiscale est lourde et pèse essentiellement sur le travail, dans la mesure où la concurrence fiscale internationale a limité la possibilité de faire peser cette charge sur le capital. Cela a suscité des craintes quant à l'incidence défavorable que pourraient avoir des taux d'imposition aussi élevés sur le marché du travail. Compte tenu de ces préoccupations, le gouvernement a sensiblement réduit les cotisations patronales de sécurité sociale, ainsi que celles des salariés, et dans le cadre de la réforme de l'impôt sur le revenu des personnes physiques il a instauré un crédit d'impôt sur les revenus d'activité. Toutes ces mesures ont été ciblées sur les titulaires de faibles revenus, de manière à maximiser leurs effets favorables sur le marché du travail en rendant plus probables des réductions durables des coûts de main-d'œuvre et/ou des taux de remplacement. D'autres réductions de l'imposition des revenus du travail ciblées sur les titulaires de faibles ...

Suggested Citation

  • David Carey, 2003. "Tax Reform in Belgium," OECD Economics Department Working Papers 354, OECD Publishing.
  • Handle: RePEc:oec:ecoaaa:354-en
    DOI: 10.1787/635485865253

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    Cited by:

    1. André Decoster & Serio Perelman & Dieter Vandelannoote & Toon Vanheukelom & Gerlinde Verbist, 2015. "A birdÂ’’s eye view on 20 years of tax-benefit reforms in Belgium," Working Papers 1502, Herman Deleeck Centre for Social Policy, University of Antwerp.
    2. Verbist, Gerlinde & Vandelannoote, Dieter & Decoster, André & Perelman, Sergio & Vanheukelom, Toon, 2015. "A bird’s eye view on 20 years of tax-benefit reforms in Belgium," EUROMOD Working Papers EM10/15, EUROMOD at the Institute for Social and Economic Research.
    3. International Monetary Fund, 2005. "Belgium: Selected Issues," IMF Staff Country Reports 2005/076, International Monetary Fund.

    More about this item


    Belgique; Belgium; fiscalité; politique fiscale; tax policy; taxation;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions

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