The Belgian federal government will spend €2.5 billion supporting savings accounts between 2023 and 2026, according to data from the Federal Public Service for Finance published on Tuesday by L’Echo.
This expenditure is a significant increase compared to the annual costs of less than €100 million in the previous five years.
Savings accounts benefit from two fiscal incentives. Interest earned, up to €1,020 per year per saver, is exempt from withholding tax. Additionally, any amount exceeding this threshold is taxed at a reduced rate of 15%, instead of the normal 30%.
The cost of these incentives to the federal government amounts to €471 million in 2023 and €818 million in 2024, according to a March inventory of federal tax expenditures. Projections indicate additional losses of €665 million in 2025 and €565 million in 2026.
This surge in costs is attributed to rising interest rates. Between July 2022 and September 2023, the European Central Bank increased its deposit rate from -0.5% to 4%, leading to significantly higher interest payments on Belgian savings accounts starting in 2023.
The government has indicated that a reform of savings accounts is included in the coalition agreement.
