Debate on Tax Shifts
Monday 16 November, we welcomed Minister of Finance Johan Van Overtveldt, Mr Bart Buysse (VBO), Mr Erwin De Deyn (BBTK-SETCa) , Mr Henk Verstraete (Liedekerke Wolters Waelbroeck Kirkpatrick) and Ms Isabel Albers (De Tijd) to our “Tax Shifts, lifts and more” event in Brussels.
The event was kicked off by Ms Muyldersmans, Vice-Chairman of Vlerick Alumni, who welcomed everyone and also gave a short introduction on the topic.
Ms Albers, Editor in Chief of the economic newspaper De Tijd, conducted the debate and opened it by introducing each participant. She sparked off the debate by asking the audience if they thought the tax shift was a positive evolution. The attendees were able to vote by using a green and red voting card. By means of their voting cards, the majority of the audience members showed they were positive about the tax shift.
We hereby present you a couple of memorable statements which our speakers made during the debate.
”Regarding income tax on wages, Belgium is wearing the ‘yellow jersey’”
Belgian Minister of Finance Johan Van Overtveldt
Minister Van Overtveldt described the tax shift as a historic change as it is an extensive intervention and alteration regarding the taxes on labour. Mr Buyse agreed but stressed that there is still a long way to go (e.g. RSZ [i.e. the Belgian National Social Security Office], more competitiveness for companies etc.). Mr De Deyn isn’t opposed to the decrease of taxes but wished that the taxes on capital also had been tackled. According to him, the taxes on consumption goods have been raised which decreases the purchasing power. Mr Verstraete pointed out that the contributions on social security have been lowered considerably which stimulates the economic growth.
“ I doubt that the projected job creation by the tax shift will be met if the purchasing power of consumers drops”
Erwin De Deynn, President of BBTK-SETCa
When Ms Albers also asked the audience whether the tax shifts would have a positive influence on their net income, the majority of the audience answered negatively. Mr De Deyn argued that for the average family, the tax shift has a negative outcome on their income. Due to the index jump, no compensation has been provided for the consequences of inflation. Minister Van Overtveldt agreed that on an individual level there only might be a slight difference or gain, but that the difference has to be viewed on a macro-economic level: the effect it will have on job creation and extra purchasing power. He claimed that Belgium has made one of the biggest saving efforts within the Eurozone which consequently has a negative effect on the needed economic growth.
Ms Albers pointed out that the tax shift’s focus was especially on unhealthy consumer goods (soft drinks, tobacco etc.), but the tax shift hasn’t really challenged any of the environmental issues (such as the tax on company cars) and wasn’t that invasive. Minister Van Overtveldt agreed and said that they rather wanted to adjust behaviour rather than causing a shock effect. He hopes that the tax shift, which takes into account the price elasticity of products, will lead to a shift towards a healthier and more environmentally friendly way of living.
“Yes, the speculation tax is a political symbol”
Henk Verstraete, Partner at Liedekerke Wolters Waelbroeck Kirkpatrick
Ms Albers also enquired Minister Van Overtveldt on the introduction of the speculation tax, which prompted much comment within the market. Minister Van Overtveldt clarified that opting for such a specific tax would cause minimal disruption in the financial markets. He is convinced it will have a positive effect on investments by stabilising these as people will have to go for long-term investments. Bart Buysse concurs with this, stating that start-ups will benefit more from long-term funding. To Mr Dedeyn the speculation tax was nothing more than a red herring, in order to avoid taxes being lifted on capital. Mr Verstraete sees the speculation tax more a “political symbol” as its effect will be rather insignificant.
“On fairness in taxes : there is no other country in the world that redistributes income more than Belgium”
Bart Buysse, General Director Federation of Enterprises in Belgium (VBO)
During one of the voting rounds, the audience agreed that the tax shift had only made the tax system even more complex, but Minister Van Overtveldt and Mr Buysse concluded that a tax shift and simplification couldn’t simply go hand-in-hand. They see it as another issue which needs to be tackled in a next stadium.
This fascinating debate was ended with a Q&A from the audience. During the networking reception afterwards, the participants had the opportunity to continue the debate with the speakers and their peers.
Take a look at the pictures: