Government fails to reach agreement on tax reform

Belgium's federal government has failed to reach an agreement on tax reform, prime minister Alexander De Croo's office announced on Tuesday evening, despite intensive consultations over the past five weeks.

"The prime minister has noted that no agreement can be reached on tax reform without seriously burdening the budget. It is the government's task to reduce the fiscal deficit step by step after three difficult years," De Croo's statement reads. "The prime minister has always maintained that these targets should not be jeopardised by the tax reform."

Finance minister Vincent Van Peteghem, who proposed the tax reform, has encountered difficult negotiations in recent weeks. ​ He was forced to scale down his proposal from 6 billion euro to 2 billion and was met with reservations from almost every coalition member.

MR says no

The most vocal opposition came from MR. On Monday, the French-speaking liberal party announced that, as far as they were concerned, no agreement was possible based on Van Peteghem's current proposal. De Croo and Van Peteghem tried to convince MR to renegotiate. All parties convened on Tuesday, but the negotiations did not succeed.

Several government parties blame MR for the failure. "It is extremely unfortunate that so much time has been lost. This could have been the reform that would have allowed people on low and middle incomes to have more left over, paid for by the wealthy. Six parties could certainly have found an agreement, but one party would not budge a millimetre."

"Six parties could certainly have found an agreement, but one party would not budge a millimetre"

Van Peteghem said that to finance the smaller plan, he looked at fair contributions from the wealthiest. "But when it came to such measures, we kept bumping into a no."

The breakdown of negotiations should not cause the Belgian government to fall, because only the preparation of a tax reform was mentioned in the coalition agreement. "Reaching new agreements on top of the coalition agreement requires the agreement of all coalition partners," De Croo's statement said, "and every partner's opinion should be respected."


Finance minister Vincent Van Peteghem © BELGA PHOTO JONAS ROOSENS

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