Belgium has suggested that it plans to raise its standard VAT rate from the current rate of 21% to fund cuts to the labour tax regime.
The Finance Minister has stated that the rise would be agreed after May’s general election. The amount of the rise has not been announced but would probably be an increase of 1% to 22%. The European Union average VAT rate is currently over 21%.
The additional Belgium VAT increase will be used to fund a reduction in the labour tax rate, which is close to the highest in the European Union, and considered to be hurting job creation. In addition, there may be a cut in corporate income tax which is an effective rate of 33.99%. The European Union average corporate tax rate is 22.75%.
