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Belgian Deficit Falls As Tax Revenues Reach New Levels

by Ulrika Lomas, Tax-News.com, Brussels

19 December 2012


According to the National Bank of Belgium (NBB), the significant improvement in the country’s 2012 deficit is attributable to a 1.7% rise in revenues this year, due notably to the fiscal consolidation measures implemented by the federal government back in December 2011.

In its economic review for December 2012, the NBB praised the positive effect of the structural measures adopted by the federal government last year, including the decision to harmonize the taxation of investment income and to limit to 3% the interest rate used as a reference for calculating the corporate tax deduction for risk capital. The rise in revenues is also attributable to temporary factors, such as the delay in payment of the nuclear tax from 2011 to 2012.

The NBB states that total revenues reached a record figure in 2012 of 51.1% of gross domestic product (GDP), up from 49.4% in 2011 and 48.6% in 2010.

Based on the latest figures, the NBB forecasts a deficit of 2.8% of GDP for 2012, 0.9% below last year’s deficit figure. The bank notes that the objective fixed in the last stability program will therefore be met, as the deficit has been reduced to below 3% of GDP.

Tax revenues are expected to rise by a further EUR1bn in 2013, with additional tax receipts expected from a crackdown on tax avoidance and a tax amnesty.

Departmental and social security spending is to be reduced by almost EUR1.4bn under the plans. However, the bank warns that, based on current previsions, the government will probably not achieve its budgetary objective of a 2.15% GDP deficit for 2013.

TAGS: tax | Belgium | fiscal policy | budget | withholding tax | social security | revenue statistics

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