Salaries in Belgium currently generate significantly less revenue for the Belgian State compared to two decades ago, a recent study has found.
Philippe Defeyt, an economist at the Institute for Sustainable Development, estimates that Belgium received a net intake of €41.60 for every €100 in payroll payments in 2022, compared to €50 in 2005. (The net intake was calculated by adding social security contributions to personal income tax and subtracting benefit payouts.)
Defeyt further calculated that, had Belgium's proportional net intake remained constant over the past two decades, its deficit would be €16.8 billion less than it is currently. This represents more than half of Belgium's projected budget deficit this year, as forecast by the European Commission.
Defeyt also warned against possible misinterpretations of the study, noting that it is neutral on the issue of whether Belgium was economically and morally justified in reducing its net intake from wages.
"This is obviously a purely indicative calculation since it is 'static'," he told L'Echo. "We do not know what employment, payroll, GDP would have been [...] in the absence of the various measures to support salaried employment that have been decided over the years."
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Belgium is set to run a total budget deficit of €26.65 billion next year, or 4.9% of annual GDP. This is one of the highest forecast budget deficits in the EU.
It is also well above the EU's fiscal limit of 3% of annual GDP, which is scheduled to re-enter into force this year after being suspended during the Covid-19 pandemic and subsequent energy crisis.
