Friday, 01 May 2020
The government’s tax income for the month of March was heavily down on the same month in 2019, according to the VRT reporting on figures from the federal finance ministry.
VAT receipts, collected on behalf of the government by business owners, were €1.3 billion lower than March last year, a drop of 60%. VAT receipts go down when consumption does, and the effect is felt immediately.
Almost all retail outlets were closed from the middle of the month. In addition, most professionals charge VAT on their services, and many of them were hit by the lockdown.
Withholding tax on professional activities was down by one billion euros or about one-third. The same applies here: when people are not earning or are living on benefits, there is less income to tax.
Worse still, the advance payments companies make on their annual tax bill fell by 30% for a value of two billion euros. Together, those three items amount to a loss in revenue of €4.3 billion.
Finance minister Alexander De Croo said he as not surprised, but described the figures as “unprecedented”.
“In fact, we could compare this to a time when war broke out. But that’s more or less what happened: we forced almost everyone to stay inside and we closed down a very large part of our business landscape.”
Now that the confinement has gone on throughout April, the decline can be expected to be repeated, but May promises a turn-around, he said.
“If we can manage to start up again from Monday and respect the rules, the economy could get rapidly back up to speed, and there will be no reason to suppose this situation is structural.”
The Brussels Times