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Belgium adopts fiscal competitiveness pact

Staff writer |
The Belgian Council of Ministers has approved draft legislation and decrees implementing the federal fiscal measures provided for in the Government's competitiveness, employment, and recovery pact.

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The pact contains a raft of measures intended to increase the competitiveness of businesses in Belgium and to strengthen the purchasing power of individuals. The Government plans to progressively reduce the cost of labor in Belgium to the tune of around 1.35 billion euros ($1.85 billion), notably by reducing employers' social contributions.

The Government plans to lower the cost of labor by 450 million euros in the first instance from 2015, by a further 450 million euros from 2017, and by an additional 450 million euros from 2019.

When taking into consideration all of the measures implemented, the Government will have lowered the cost of labor by a total of 4.7 billion euros by 2019.

Furthermore, the pact strengthens the so-called "work bonus" accorded to low-paid workers in Belgium. Employees with gross monthly income of 1,500 euros will receive a progressive wage increase of 120 euros net a year in 2015, 2017, and in 2019, amounting to a total annual net salary rise of 360 wuros in 2019.

Finally, the Government plans to reduce the rate of value-added tax (VAT) levied on household electricity from 21 percent to 6 percent, from April 1, 2014.

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