2023-11-18 11:39:26
Update
November 18, 2023
12:39
Finance Minister Vincent Van Peteghem affirmed, during Finance Avenue, that the Debt Agency might, once more, issue a one-year state bond in March 2024.
Could a new one-year government bond, with a tax advantage like the one issued last September, see the light of day once more? “The possibility now exists for the Debt Agency to diversify its loans with shorter maturities. It is a decision that must be taken, depending in particular on the financing plan of the Debt Agency”, affirmed the Minister of Finance Vincent Van Peteghem, during the Finance Avenue event, organized by L’Echo and De Tijd. A one-year state bond would once more be accompanied by a reduced withholding tax of 15%.
“In September, when we issued the one-year government bond with a withholding tax reduced to 15%, it was to revive competition between banks.”
While the Debt Agency announced yesterday that it would issue two government bonds in December, at 5 years and 8 years, the minister also explained the reason why this choice had been made. “In September, when we issued the one-year state bond with a withholding tax reduced to 15%, it was for revive competition between banks. To do this, it was necessary to compete with savings accounts whose interest is also taxed at 15%, above 980 euros. For the December issue, a one-year government bond did not fit into the Debt Agency’s financing plan. The maturities of 5 and 8 years were chosen, but given that savings products of the same maturity are taxed with withholding tax of 30%, we have maintained the same taxation,” he explained.
Banking competition
The one-year government bond was launched to compete with banks so that they would finally raise interest rates on savings accounts while mortgage rates had already increased considerably. “At the time, all parties agreed to raise the minimum interest rate by 0.11%. I was the only one who thought that this was not going to revive competition between banks at all. And finally, we opted for the state bond, with a short maturity and with a tax advantage,” he explains.
But while the Competition Authority has also singled out Belgian banks for their lack of competition, the minister affirms that we must work on several axes, without threatening the stability of the banking sector. As in the energy and telecommunications sectors, “we must particularly work on transparency and ease of changing banks”.
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