Belgium misses out on 11 billion euros in VAT each year

The Belgian tax authorities miss out on a fifth of the VAT due on products and services every year, according to a study by the International Monetary Fund (IMF). The figures are high compared to neighbouring countries, De Tijd and L'Echo write on Wednesday.

If all Belgians paid the VAT due on what they consumed, the government would have an additional 11 billion euros a year in revenue, says the study, commissioned by the Belgian government. The country's budget deficit would immediately fall below the limit of 3 per cent of gross domestic product.

The general reasons for the uncollected VAT revenue are goods and services supplied off the books, poor administration of international trade, tax optimisation and the bankruptcy of companies with outstanding VAT debts. 

After the De Croo government took office at the end of 2020, the proportion of uncollected VAT rose temporarily to 30 per cent of revenue. The IMF attributes this to the disruptive effects of the Covid-19 pandemic and aid, which led to payment delays and a "cash effect". This effect was over by 2021.

Belgium's neighbours are more successful at actually collecting the consumption taxes they levy, European data shows. 

^{© BELGA PHOTO NICOLAS MAETERLINCK}