BRUSSELS: Belgium should reduce its high corporate income and labor taxes and eliminate value-added tax (VAT) concessions, the International Monetary Fund (IMF) has said in its Article IV report for the country.
The report notes that Belgium intends to reduce its high personal income tax and social security contribution rates in 2018-2020. However, plans for corporate income tax reform have yet to be agreed.
The IMF recommended that Belgium could target a revenue-neutral adjustment by hiking environmental taxes, eliminating deductions and exemptions, including on VAT and for company cars.
It said the authorities’ plan to lower the relatively high corporate income tax (CIT) rate has clear merits but Belgium should add to its plans revenue-offsetting measures to ensure that the country’s fiscal consolidation strategy remains on track.
