A potential revision to Belgium’s VAT system should include reductions on certain products rather than merely increasing rates, according to CD&V party leader Sammy Mahdi.
On Sunday, Mahdi told VTM Nieuws that while cuts to certain subsidies and business advantages could be implemented, the government must also deliver a growth plan that addresses issues such as rising energy costs for companies.
The federal government has around 40 days left to reach an agreement on the multi-annual budget. Following failed negotiations last week, a brief pause was initiated to calm emotions. However, Mahdi has stressed that the coming days must be used to work intensively towards a deal, adhering to a strict timetable.
Prime Minister Alexander De Croo is seeking at least €10 billion in savings to put the national budget back on track by 2030. According to Mahdi, however, achieving full fiscal balance would require adjustments totalling €13 to €14 billion. While he supports reforming VAT, he insists that any changes should not add to the overall cost of everyday items. While luxury goods might face higher VAT rates, he advocates for reductions on essential products.
Mahdi also recommends scrapping certain subsidies, singling out the subsidy for businesses’ first hires, which he claims costs half a billion euros annually without delivering substantial benefits. He further called for stricter measures to tackle abuses tied to management companies. Achieving these changes will, he acknowledged, require buy-in from the MR party. To gain widespread support, Mahdi believes the government’s approach must be comprehensive, including initiatives such as a business growth plan.
CD&V remains firmly opposed to introducing a wage index freeze, arguing it would hit hardworking citizens, especially employees and pensioners, the hardest. Mahdi accepts there could be scope for adjustments to the benefits index applied to unemployed people, in line with coalition goals to increase the gap between working and non-working income. Additionally, he stressed the importance of an agreement promoting safety as a critical government priority.
Meanwhile, N-VA parliamentary leader Axel Ronse expressed uncertainty in De Zondag about whether the coalition would finalise its agreement before Christmas. Should negotiations fail, Ronse suggested early elections might be necessary but added that his party remains committed to ensuring a successful outcome and is not currently focused on election preparations.
