Fiscal revenue plummets

According to figures released by the Federal Finance Service, fiscal revenue fell sharply in March. Since 14 March measures have been in place to curb the spread of the novel coronavirus. These measures were tightened still further at noon on Wednesday 18 March. Many businesses and all shops selling non-essential goods closed for around half of the month. As a result of this the amount of money raised in taxation in March 2020 was well down on the figure for March 2019. 

The closure of shops selling non-essential goods brought with it a big fall in VAT revenue. Meanwhile, the large number of people that have been laid off work saw revenue from income tax plummet.

Revenue from VAT was down 60% (or 1.3 billion euro) on March 2019. Meanwhile, Income tax revenue was down by one third and was 1 billion euro less in March 2020 than was the case in March 2019.

On Thursday, it was announced that the amount of taxation pre-paid by companies was down 30% (2 billion euro) in March.

The Federal Finance Minister Alexander De Croo (Flemish liberal) told VRT News that he isn’t surprised by the “unprecedented” figures.

"Really it is comparable to a war breaking out. But it is also a reflection of the measures we have taken. We have obliged almost everyone to stay indoors and have shut down a large proportion of our shops. We had expected this, but it does of course bring a lump to your throat when you see the figures”.

Mr De Croo added that this will be a one-off and if the re-start of the economy that will get under way from Monday is handled well and we stick to the rules there is no reason to believe that the sharp downturn in revenue is structural. However, things coild be very different if the European economy remains in crisis.