Is the government planning a VAT hike?

Belgian Finance Minister Johan Van Overtveldt has given indications about how he sees the tax shift expected to be implemented by the federal government. Mr Van Overtveldt suggests raising more tax through the sales tax VAT and thinks a wealth tax is a lower priority.

The governing Flemish Christian democrats are big supporters of a tax shift from labour to capital and are arguing in favour of a capital gains tax on people with large fortunes. Speaking with the daily De Tijd Belgium's Flemish nationalist finance minister came out in favour of a tax shift that would see higher taxes raised from consumption via the VAT sales tax.

"I do not want to limit the debate to a shift from labour to capital" he told de Tijd.

Mr Van Overtveldt singles out VAT as his favourite source of fresh income followed by environmental taxes and wealth. He believes VAT is a reliable source of income, while environmental taxes will only lead to a change in behaviour and not higher income.

"People should know how little a tax on big fortunes would raise."

The finance minister believes many VAT exceptions could be axed. He acknowledged that the tax shift will probably involve 5 billion euros over 5 years.