Belgian government reaches €9.2 billion budget deal: what we know so far

Belgium’s federal government has agreed on a 9.2 billion euro budget package after more than 20 hours of negotiations, introducing targeted tax shifts, earlier income tax cuts and changes to wage indexation, while avoiding a general VAT increase.

Belgium’s federal government finalised its long-delayed budget agreement early this morning, shortly after 6.15 a.m. Prime minister Bart De Wever described the discussions as “a tough exercise”, but said he was relieved that the coalition avoided postponing difficult decisions. “We have an agreement,” he said. “It wasn’t easy, but the team held together.”

The package outlines 9.2 billion euros in measures, slightly below the 10 billion euro target. Here’s what we know so far:

Targeted tax adjustments

There will be no general VAT increase, but several sectors will see higher rates. Takeaway meals, hotel stays, campsites, sport and leisure activities will move to 12 per cent VAT. Gas will avoid a VAT rise but will gradually become more expensive due to higher excise duties, while electricity will become cheaper thanks to lower excise duties. 

Combined, the VAT and excise reforms are expected to bring in around 1.3 to 1.5 billion euros.

Income tax and indexation

A major personal income tax cut will be implemented earlier than planned. Reductions of 772 million euros in 2028 and around 3 billion euros in 2029 will arrive one year sooner than originally foreseen.

The indexation system will also change. Most workers will continue to receive full wage indexation, but higher salaries from 4,000 euros gross per month will shift to a capped, fixed-amount increase. Meanwhile, the minimum wage will rise by 50 euros from 1 April.

Healthcare and other measures

Patients will face higher co-payments for doctor visits. The healthcare sector’s growth limit will be reduced from 3 per cent to 2.5 per cent, although up to 3.7 billion euros in extra investment is planned.

Additional measures include a rise in the short-distance flight tax to 10 euros in 2027, a parcel tax on small non-EU orders from retailers such as Shein, a doubling of the securities tax and an increase in the bank tax. The government also aims to return 100,000 long-term sick individuals to the labour market.

Political reactions

MR president Georges-Louis Bouchez said his party “was heard”. He underlined that there is no broad VAT increase and that purchasing power is protected. “The shopping basket is safe, and wage indexation remains fully protected with a social correction,” he said.

Vooruit leader Conner Rousseau said many social measures had been preserved. “We fought hard for purchasing power and healthcare,” he commented. “You can’t save a budget with only good news.”

^{Prime minister Bart De Wever ​ at a press conference to announce an agreemnet on the budget © BELGA PHOTO EMILE WINDAL}