1. Interesting reminder about VAT in Belgium:
-* 0 % newspapers, insurance, legal fees
-* 1 % purchase gold at the end of the investment
-* 6 % flowers, construction works in buildings over 15 years
-* 12 % certain goods and services (coal , margarine, television subrscription, …)
-* 21% … It applies to all products that are not affected by the reduced rate ( cars, clothes , gas , electricity … )
2. Why a reduction in VAT on Electricity?
-* VAT on Electricity is part of the consumer index, a decrease in this rate would have a direct impact on the food basket and will delay the wage indexation, which is profitable for both companies and for the state that must pay their employees.
-* The 6% VAT on electricity generates a lower wage cost of 0.42 %. On the fiscal side , it would weigh 196 million euros in 2015 and 309 million by 2018.
-* According to the Bureau of the plan, it appears that the track of a reduction in VAT on electricity of 6% from April 2014 would create more jobs linked to a reduction in labor costs of about $ 600 million from 2015. In 2018 they believe a possible creation of 10,790 jobs.
3. Transition costs of VAT from 21% to 6%:
-* Experts estimate the cost at around 60 MM EUR (130 MM EUR gross cost less gain on indexation)
-* The federated entities would save + / – EUR 100 MM (building costs)
4. The decline of 6% it is the only possible measure to a stimulus of the Belgian economy?
Two alternatives are being considered by the Office of the plan are:
-# The mixed scenario of reduction in VAT on electricity to 6% in April accompanied by a decrease in expenses 400 million euros from 2015 would expect the creation of 15,270 jobs by 2018 (but will also cost 500 MM EUR / year)
-# A reduction in VAT on electricity to 12% from April 2014 would create 5.900 jobs by 2018.
Sources:
BeCompta
LaLibre 6 Octobre 2013
LaLibre 7 octobre 2013
