The stage is now set for Belgium’s economy to grow. On July 23, the Federal Government agreed on the budget for 2016 and a €7.2 billion tax shift. The focus is on jobs and competitiveness.
The tax shift marks a new start for Belgium. By shifting part of the tax burden from labor to consumption, pollution and capital gains, the Michel Government aims to improve the country’s economic growth and competitiveness. The goal is simple: spur job growth.
Job creation and competiveness start with lowering the high cost of labor and tackling the country’s wage handicap compared to the neighboring countries. The Government has decided to decrease the employer’s social security contributions from 33% to 25%, a long-standing AmCham Belgium recommendation.
By reducing the high cost of labor, companies are able to better compete on a more level playing field.
DOWN BUT NOT DONE
The tax shift is an important step in the right direction, and AmCham Belgium welcomes it. The Government has recognized the importance of decreasing Belgium’s wage handicap, and continues to hold true to its pledge to increase economic growth and jobs.
But while one AmCham Belgium priority has been met, there is still room for improvement.
According to Voka, the Chamber of Commerce and Industry of Flanders, the measures implemented in the tax shift will reduce the wage handicap down to 10%. To truly come to an equilibrium with other countries and to create even more jobs, the wage handicap should be reduced until it is eliminated.