Belgian Tax Reform Proposal: Harmonizing VAT Rates and Its Potential Impact on Consumers and Economy

2023-06-15 14:14:50

The Belgian government will try once again to agree on the tax reform. This weekend, he will discuss the possibility of modifying the VAT. Finance Minister Vincent Van Peteghem proposes harmonization of VAT. Thus, the VAT on basic necessities (bread, milk, meat, fish, etc.) would increase from 6 to 9%, the VAT on fruit and vegetables, public transport, intimate hygiene products and medicines would decrease. from 6 to 0%.

VAT on margarine and restaurants would also decrease from 12% to 9% and VAT on gas, water and electricity would remain unchanged (6%).

On the side of fevia, the Federation of the Belgian food industry, we are worried. “We fear that more and more Belgians will go shopping ine the other side of the border where prices are lower“, advances the economist Carole Dembour. We expect, if we have a VAT increase of 6 to 9% (on basic necessities, editor’s note), that around 1 billion euros will be spent by Belgians in French and Dutch supermarkets. One in eight Belgians already goes shopping in France every six weeks.”

But nothing at this stage is set in stone. “There is no question at Ecolo of increasing VAT on basic necessities”answers Gilles Vanden Burre, group leader in the Chamber (Ecolo). “VAT is not a means of offsetting in the state coffers what we are actually going to put in as tax reform to increase the net salary for the citizen. The way to do this is to go seek in the broadest shoulders.”

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