Unformatted text preview: axes, proceeds from which and legislative jurisdiction over which have been partially or wholly transferred
to the Regions and are now called regional taxes; ♦ personal income tax, discussed earlier, which has the status of a joint tax; ♦ new taxes adopted by the Regions. 20 Before pursuing the matter, it would be useful to make a distinction, with the Conseil Supérieur des Finances (1999),
whose report written in 1998 also bears examination in order to ascertain to what extent the Regions have made use of
their autonomy, and Valenduc (2002), in respect of the aforementioned taxes, between complete autonomy, autonomy
in respect of rates, autonomy in respect of margins, and the absence of autonomy. These distinctions are noteworthy in
light of the 2001 reform. 19
20 See, in particular, Boadway and Hobson (1993) concerning the economics of equalization.
This term, used in Belgium, is however misleading since it actually means that Regions are allowed to levy extra tax or grant rebates with respect to
the federal government tax. 183 Commission on Fiscal Imbalance a) Regional taxes
Regional taxes, formerly national taxes, from which the proceeds, collected by the federal government, are entirely
attributed to the Regions, initially numbered eight under the law of January 16, 1989.
A first group of taxes, i.e. the tax on gambling and betting, the tax on coin-operated amusement devices and the tax on
the opening of drinking establishments, were previously refunded to the Regions. As the Conseil Supérieur des
Finances (CSF) has noted, “the 1989 law respecting the financing of the Communities and Regions in this respect
confirmed the current situation.” On these taxes, “the Regions enjoy complete autonomy and may freely determine the
taxation base, exemptions and tax rates” (Conseil Supérieur des Finances, 1999, our translation).
The second group comprises the real estate tax and transfer duty upon death and inheritance tax. In this instance, the
fiscal autonomy of the Regions is no longer complete since the federal government is empowered to determine the
taxable base. The Regions enjoy autonomy solely with respect to tax rates.
The real estate tax, which stands at 1.25% in the Walloon and Brussels-Capital Regions and 2.5% in the Flemish
Region, is a levy on rental value, i.e. an imputed value called the cadastral income, of real estate, which federal
authorities may decide to partially or totally charge on corporation tax or personal income tax. According to the CSF (our
translation), “the discussion of the grounds for the law respecting financing justify as follows the choice made with regard
to the real estate tax:
♦ to establish the tax base […] requires a vast administration and to regionalize it would lead to an impressive extension of
this administration which, in particular, would increase the cost of collecting the tax; ♦ cadastral revenue intervenes in respect of the administration of several national taxes […].” As for inheritance taxes, in respect of which Flanders has reduced the marginal ra...
View Full Document