With Labour Day on 1 May fast approaching, the Flemish socialist Vooruit party is launching a proposal to impose an additional tax on all companies that make excess profits, which would generate €1 billion for the state treasury.
The extra €1 billion will go to the state treasury, which can then flow back to the consumer. “That way we shift part of the war bill to those who have the buffers to absorb it,” party leader Conner Rousseau told Het Nieuwsblad.
The war in Ukraine is strongly affecting Belgians’ budget: rising gas and energy prices, rising food prices and rising inflation are all having a big impact – which will in turn result in a collective and societal impoverishment, according to an official Vooruit note seen by De Morgen.
“A decline in purchasing power in Belgium is a regrettable reality. The bill for that impoverishment will make itself felt in the budget. That is precisely why we must divide the effort to bear that impoverishment in a fair way,” it added.
Earlier on Thursday, five of the seven parties represented in the Federal Government already stated that they were in favour of taxing wealthy Belgian individuals and companies to counter the soaring cost of living.
The Flemish and French-speaking Socialists (Vooruit and PS), Greens (Groen and Ecolo) and the Flemish Christian-Democrats (CD&V) support the idea. While the liberal French-speaking MR “strongly disagreed” with the proposal, its Flemish counterpart, Open Vld, said it would consider it with “an open mind” if it could help the middle classes deal with the rising costs.
In the Federal Parliament on Thursday, Vooruit group leader Melissa Depraetere said that her party stands for “both the protection of purchasing power and a fair distribution of the burden.” Now, however, “10% cannot pay their energy bill while 1% owns a quarter of all wealth. That fair distribution of the burden is not there today.”
"@vooruit_nu staat voor én de bescherming van de koopkracht én een eerlijke verdeling van de lasten.
10% kan zijn #energiefactuur niet betalen terwijl 1% een kwart van alle rijkdom bezit. Die eerlijke verdeling van de lasten, die is er vandaag niet", @MelissaDepr in @DeKamerBE pic.twitter.com/8SZe0kq77G
— Vooruit (@vooruit_nu) April 28, 2022
Therefore, Rousseau wants to extend the VAT reduction on gas and electricity and officialise the extensive social energy rate. “For Vooruit, it is unacceptable that working people should lose purchasing power when there are companies that report high profit margins,” he said, adding that he wants to demand “a purchasing power contribution” from companies with “enormously high” profit margins.
They do not want to get the money from companies that are in trouble, but from a select few that earn a lot from the current crisis such as companies that make “more than normal” profits as a result of a powerful market position, for example, a monopoly.
Those who have made large excess profits would see those profits taxed at 35%, while normal profits will continue to be taxed at 25%. As a definition of “excess profits,” Vooruit is aiming for a 8% “return on invested capital” – a calculation with historical value, as “the Americans also used that threshold for an excess profit tax during the Second World War”
Vooruit estimates that the proceeds of this purchasing power contribution would result in approximately €1 billion for the national treasury.