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Unformatted text preview: regional taxes. At the time, the regions were granted their own tax jurisdiction in this respect.
However, the tax jurisdiction varied depending on the tax considered. Thus, depending on the case, the regions could
alter the tax rate, the tax base and tax exemptions, or only some of these components. Moreover, the regions did not
systematically benefit from the entire amount of those taxes’ revenues.
Table 4.1. below indicates the breakdown of jurisdiction between the federal government and the regions.
BREAKDOWN OF JURISDICTION OVER REGIONAL TAXES BEFORE 2001
Regional taxes Tax on gambling and betting
Tax on automatic amusement devices
Tax on the opening of drinking
Estate tax and inheritance tax
Real estate tax
Registration fees on the transfer for
payment of real property
Road fund tax on automobiles
Ecotaxes Base Rate Exemption Revenue Regional
Regional 100% regional
100% regional Federal
Federal 100% regional
100% federal The choices made in 1989 (and in 1993) have, consequently, given rise to different degrees of fiscal autonomy.
The first three taxes indicated in the table, the tax on gambling and betting, the tax on automatic amusement
devices and the tax on the opening of drinking establishments, were the only truly “own taxes” of the regions. The
regions were empowered to set the tax base, the tax rate and tax exemptions and all of the revenues from such taxes
were allocated to the regions. However, it should be noted that such revenues were fairly small, i.e. roughly 4% of the
regions’ total revenues.
Estate tax and inheritance tax and the real estate tax were only partially regionalized since it was the federal
government that established the tax base in respect of both taxes. However, the reason for this reduced autonomy
differed between the two. Until 2001, the tax base in respect of estate tax and inheritance tax had been maintained at
the federal level since its definition had significant implications from the standpoint of redistribution.48 As for the real
estate tax, the reason was more technical in nature. Since cadastral revenue serves as the tax base for the regional real
estate tax, piggyback communal taxes and a portion of federal personal income tax, it was desirable to maintain a single
tax base to avoid making tax calculation unduly complex. Rates and exemptions fell under the regions’ jurisdiction and
revenues from both taxes were entirely allocated to the regions. 48 In March 1998, the Cabinet introduced an action for cancellation before the court of arbitration, maintaining that the Flemish government had
undermined the federal government’s jurisdiction over the establishment of the tax base in respect of the estate tax. Aside from modifying the rates,
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