October 31, 2020

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Business leaders want lower labor costs offset by …

Business leaders want lower labor costs offset by ...

Photo: Jordi Huisman / Hollandse Hoogte

Belgian business leaders are far from satisfied with the current wage tax system. They want a cut in the many fringe benefits in combination with lower taxes on fixed and variable wages. This is the result of a survey by the Vlerick Management School, which can also serve as an inspiration for De Croo’s new government.

Only 6 out of 100 Belgian business leaders are satisfied with the current wage tax system. The high wage costs and the tax approach of the mobility budget are particularly criticized. This is perceived as too complex and difficult to integrate into an overarching approach.

The fact that no fewer than 35 different systems were built for all types of ancillary services was also criticized. The most popular are the company bike, hospital insurance and meal vouchers. On the other hand, the company managers are least satisfied with the share-based remuneration, the personal PC system and the repayment of contributions in the third pillar of pension (Vorsorgesparen, ed.).

Thorough reform

Most business leaders therefore advocate a thorough reform, only 3 percent want to keep the current wage tax system. In return for lower taxes on fixed and variable wages, people are willing to drop the favorable tax system for many fringe benefits. In addition, many are in favor of employees being able to make an additional contribution (e.g. via variable remuneration) to their pension plan under favorable tax conditions.

“If the government were to reform payroll taxes, it would be good to build favorable tax (and parafiscal) regimes around a number of social priorities. I am thinking of sustainable mobility, financial well-being (e.g. pensions, health insurance) and support for working from home, ”argues Professor Xavier Baeten of the Vlerick Business School.

293 companies took part in the survey.