© BSIP / Reporters

Tax amnesty launders a billion euros

The people of Belgium continue to regularise large sums of money that until now were kept beyond the ken of the Belgian taxman.  The government introduced the procedure in 2016 and since then a billion euros worth of cash have been regularised in this way.

This is good news for the Belgian treasury and the Belgian economy.  Part of the cash is injected in the legal economy boosting tax revenue.  Back taxes and a penalty are also paid. The procedure is intended for people who failed to pay tax on income in years gone by and boils down to a fiscal amnesty.  Since 2016 1600 applications have been made.  Of the one billion euros 326 million is levied as back taxes.

Belgian finance minister Van Overtveldt explains that the procedure is rather punitive.  Fail to pay 25% capital gains tax on income from investments in the past and today follow the procedure and be taxed 48% (25%+23% penalty).

Much of the cash originates from tax havens including Luxembourg and Switzerland.  Switzerland is now providing the Belgian taxman with information and this unsettling some citizens.

The government's banking on an extra 300 million euros from the amnesty this year as in the past there has always been a Christmas rush.