Belgian VAT shake-up sparks backlash from businesses and consumers
Belgium’s federal government agreed on Tuesday a set of VAT changes to repair the budget, but the plan has triggered a backlash. Businesses and opposition figures warned of a “Kafkaesque” tax system.
From 1 March, VAT on sport, culture and entertainment will rise from 6% to 12%. Hotel stays, camping and takeaway food will also become more expensive. Takeaway is now defined as any prepared meal or drink with a maximum shelf life of two days. At the same time, VAT on non-alcoholic drinks in cafés and restaurants will fall from 21% to 12%.
The government says the changes are needed to keep public finances under control. It must save €9.2 billion during this term.
Business groups are far from convinced. Unizo, which represents entrepreneurs, says the rules create confusion and extra costs. It criticises the lack of protection for contracts and bookings made under the old VAT rate, meaning firms and customers could suddenly face higher bills. Unizo also calls the two-day shelf-life rule for takeaway “Kafkaesque” and warns of grey areas, more paperwork and disputes.
Retail federation Comeos also regrets the VAT rise on takeaway meals, calling it a blow to consumer buying power and to businesses. At the same time, it welcomes the new clarity.
Opposition politicians have openly mocked the system. Liberal MP Vincent Van Quickenborne (Open VLD) gave examples of what he called “absurd situations”, such as an artisan baker having to charge 12% VAT on a freshly made ice cream cake, while a mass-produced ice cream sold by a multinational stays at 6%. He warned that shops will need complex lists to decide which products fall under which rate.
Left-wing leader Raoul Hedebouw (PVDA), in turn, went viral after joking in parliament that the same croissant could be taxed at 6% in the morning and 12% at lunchtime. His comments were widely shared on social media and even picked up by foreign media, turning the VAT rules into a running joke.
© BELGA PHOTO BENOIT DOPPAGNE