Reducing value-added tax (VAT) on electricity to 6% and increasing the minimum wage to 14 euros per hour are among key components of a “well-being plan” presented on Monday by Flanders’ Socialist Party-Differently (sp.a) as it launched its pre-campaign for the May 2019 elections. The plan’s estimated cost is over 1.5 billion euros, and the main concerns it addresses relate to social security and purchasing power. “For us, the elections have to do with the issue of care, pensions and an affordable life,” the Flemish socialists said. “We shall mount a programme that will have to ensure more security and a better distribution of wealth.”
In addition to the minimum wage hike and the VAT cut, the sp.a is advocating increases to the lowest allowances and pensions.
The bills required to bring about these changes have already been drafted and will be lodged in parliament, the socialist said.
Under the proposed plan, the well-being budget would be increased to 353 million euros. Lowering VAT on electricity would cost 712 million euros, while the increase in the minimum wage to 2,300 euros per month, coupled with a reduction in employers’ contributions for small and medium incomes, would require a budget of 500 million euros.
According to the sp.a, this plan is financially neutral since there is already a well-being provision in the budget of Prime Minister Charles Michel’s government. The remaining 1.2 billion euros should come from fiscal measures such as an end to tax eases for professional footballers and diamond operators, which should bring in 122 million euros.
Other measures provided for in the plan include limiting the fiscal advantages for financial holdings (324 million euros), applying the European directive on tax evasion (604 million euros), eliminating bank secrecy (150 million) and examining the shortcomings in the tax on securities accounts (121 million).