Income inequality in Belgium is higher than expected, National Bank finds
The wealthiest one per cent in Belgium contribute less in taxes and social contributions relative to their income, figures from the National Bank of Belgium (NBB) revealed on Monday. The data shows that income inequality in the country is significantly higher than previously assumed.
According to the NBB, Belgium’s Gini coefficient — a standard international measure of income inequality — stood at 30 in 2022, compared to earlier estimates of 25. A higher Gini coefficient indicates greater inequality.
“We always believed Belgium had relatively low inequality compared to the rest of the EU. Although income redistribution is still substantial, the actual level of inequality has clearly been revised upward,” said Rutger Kemels, economist-statistician at the National Bank.
Although income redistribution is still substantial, the actual level of inequality has clearly been revised upward”
The adjustment stems from better measurement of top incomes, which had been consistently underestimated in earlier surveys. “High earners tend not to fully disclose their income. The new methodology captures those more accurately,” added Roeland Beerten, head of statistics at the NBB.
Highest earners benefit most
In 2022, the top 1.8 per cent of earners accounted for 10 per cent of all disposable income in Belgium — the same share as the bottom 27.5 per cent of households. This means about 92,000 of the richest households earned as much as 1.4 million of the poorest.
The top one per cent — households earning an average of 430,000 euros annually — stand out in particular. While most higher incomes are taxed progressively, much of the income for this group comes from assets like dividends and interest, which benefit from lighter tax treatment and are exempt from social security contributions.
“This favourable treatment reduces the tax burden on top earners and drives inequality”
“This favourable treatment reduces the tax burden on top earners and drives inequality,” the NBB notes. “Relatively speaking, the strongest shoulders do not bear the heaviest burden,” said NBB director Géraldine Thiry.
However, the NBB stresses that in-kind social transfers — such as access to education, healthcare, and culture — help offset some of this inequality. “These transfers play a crucial role in reducing disparities and improving the living standards of low-income households,” the bank said.
PHOTO © IMAGEBROKER
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