The federal government’s core cabinet concluded its budget meeting today. As expected, no major political decisions have been made yet. The talks will continue on Monday.
The top of Vivaldi’s government withdrew to a secret meeting this weekend to discuss preparing next year’s budget. It was clear in advance that real political action would not present itself until later this week. The Prime Minister is not expected to appear before Parliament before October 10 with his political statement, which includes the government’s plans for the final year of the legislature.
The work this weekend was technical in nature. Various figures have been determined on the basis of reports from consultations between working groups, such as revenues and costs of various measures. Political arbitrations will come later on the basis of this numerical work. As is well known, Vivaldi’s coalition agreement stipulates that the rule of one-third applies to reform work: one-third taxes, one-third savings, and one-third miscellaneous. Discussions continue on Monday from four in the afternoon until six in the evening.
In the agreements concluded with Europe, the government allocated an effort of 0.2 percent of GDP for next year. Initially, this required an effort of 1.2 billion euros, but according to the monitoring committee, about 800 million euros will be sufficient. It remains to be seen what amount the government will drop.
Excess profits tax
Last week, Forwit launched a plan to impose an excess profits tax on major banks. This would bring in nearly €600 million, but CD&V Deputy Prime Minister Vincent van Petegem was not in favor of banks’ profits having to go to savers in the form of higher interest rates, rather than to the government.
The other option on the left is to increase the securities tax to close the gap. This is an annual tax of 0.15 percent on securities accounts worth more than €1 million. This is good for revenues of around €400 million. The Socialist Party was told that tripling this rate would result in an additional income of €800 million, and that quadrupling it would amount to no less than €1.2 billion.
According to the Green Party, there are also opportunities to impose a higher departure tax (airline tax) because it is much higher in neighboring countries than in our country. Open VLD yesterday launched a proposal to permanently reform the VAT on demolition and reconstruction at 6 percent. CD&V is also committing to extending the reduction from 21 to 6 percent.
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