EC instructs Belgium to cut taxes on labour

The European Commission has formulated four recommendations for the Belgian government. The EU executive says Belgium should put grease to its elbow and reduce taxes on labour generating revenue from other sources.

Prime Minister Charles Michel's team have been working on a tax shift from labour to other sources of income e.g. environmental taxes or taxes on capital gains for some time, but the deadline for a decision on a package of measures has been delayed until after the summer.

The EC now urges Belgium to make root-and-branch reforms. Presenting its recommendations for the 28 EU member states today the commission said that Belgium above all needs a tax shift.

The EU is pressing for lower taxes on labour and a hike in taxes on pollution, capital and real estate. The EU also underlines the need for binding agreements between the federal and devolved administrations on the budgetary effort each has to make.

In addition to a tax shift the EC is urging Belgium to make sound its public finances and proceed with retirement pension reforms.

The recommendations include easier access to the labour market for immigrants, the over 50's and youngsters with skills being matched to employers' needs.

Wages should not increase faster than productivity and the EU once again criticises Belgium's automatic linkage between price increases and public sector wages and benefits.