Deputy prime ministers weigh in on cost-effective options

Prime Minister Elio Di Rupo is hoping to put the final touches to his stimulus package on Sunday evening. On the table in front of his deputy prime ministers lie around ten different proposals. Their objective? To take cost-effective measures (there is only €200 million available), that will have the greatest possible impact on citizens’ purchasing power and companies’ competitiveness. Below are some of the options: 

Taxes on savings. The CD&V submitted a new memo which described extending the withholding tax exemption to products other than savings accounts. In concrete terms the exempt amount would remain at €1,880 euros, but the savings account holder would be able to take into account any income earned from, for example, shares, fixed-income securities and longer-term deposits. The proposal, put forward by Koen Geens, plans for a gradual progression – in 2015, therefore, the saving customer could exempt €400 (originating from products other than a savings account) from withholding tax, but by 2020 it could be as much as €1,880 euros. It would remain more of a “possibility”, rather a requirement to empty one’s savings account. The overall goal is to reinject money into the economy. 

VAT on electricity. The suggestion originates from Johan Vande Lanotte. The idea involves bringing the rate of VAT on electricity down from 21 % to 6 %, a move that would boost Belgians’ purchasing power. It would also help companies’ competitiveness because a drop in price has an effect on the index, and therefore slows down salary increases. The office of the SP.A deputy prime minister believes that the net cost of the measure, if it came into effect on April 1st, would be €56 million for 2014. The initiative had received the support of five of the majority parties, but the CD&V rejected it out of hand. 

Decrease in charges. Open VLD suggested reducing charges for businesses engaging in non-stop activity (24 hours a day). This request originates from the chemical and pharmaceutical sectors in particular, but it would apply to all relevant sectors. 

Investment deductions. This idea also stemmed from the Open Flemish Liberals and Democrats. The measure would help new companies that are faced with major investments when starting up. 

Fewer paid holidays? CD&V once again floated the idea of ending paid holidays that fall on a Saturday or Sunday. Rejected countless times, it has very little chance of succeeding. Another measure being looked at involves supporting training. Moreover, the Socialist Party stressed that “We need a measure that will support purchasing power”.




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