Belgium sugary drinks levy to fund labour tax cuts

Fri 16th Oct 2015

The new Belgian budgets for 2015 and 2016 introduces a tax shift from labour to consumer taxes, including a new tax on high sugar content drinks and other fattening products.

Belgian has almost the highest employer tax rates in Europe:

The new budgets will cut the employer job taxes from 33% to 25%. Small enterprises with more than 5 employees will also enjoy a social security holiday on the sixth employees. The self-employed will see a cut in contributions from 22% to 20.5%.

New VAT rises

To fund the above cuts, there will be a rise in the VAT rate on domestic electricity supplies from 6% to 21%. Belgium will also introduce a tax on sugary drinks from 1 January 2016. This levy may be introduced to other fattening foods at a later date.

EC calls for less employment taxes and more VAT

A report published in September by the European Commission recommended that all EU countries review their tax regimes on employment. It highlighted that Europe has some of the highest employer taxes – known as the ‘tax wedge’ – in the developed world. The Eurozone countries were identified has charging the highest burden on employers. The Commission recommended that more countries shift taxes away from job-creating companies onto consumption, including extending the VAT base and cutting down on the use of reduced VAT rates.

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