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Unformatted text preview: view to reducing the community’s means when needs decreased in the wake of a drop in the number of schoolaged children. This demographic development was calculated separately for each community in the form of an
adaptation factor. Between the two adaptation factors, the one most favourable to the communities was adopted and
applied to the transfer overall. The less negative change observed in a community thus financially benefits the
community in which the number of students is declining most rapidly, i.e. the Flemish community.
The third and final phase consisted in apportioning the total amount between the French-speaking and Flemish
communities. The criterion considered in this regard was the financial need of the communities, reflected in the number
of students in 1989, i.e. 42.45% for the French-speaking community, and 57.55% for the Flemish community. This
allocative key was modified in 2000.6 The VAT transfer represented on average 65% of the communities’ total financial
resources in 1998.
It should be noted that no explicit solidarity mechanism had been implemented in respect of this segment of financing
since the consideration of needs, rather than means, as a criterion for allocation constituted implicit solidarity.
The personal income tax transfer differed in three ways from the VAT transfer, i.e. annual changes in the total amount,
the criterion governing the breakdown and attribution of the transfer in the federal budget were all determined differently.
The total amount attributed in respect of the personal income tax transfer was equivalent to the basic amount of the
permanent period, adapted annually to changes in consumer prices and, starting in 1993 (see section 2.1.2), to growth
in national revenue. The transfer was divided between the two communities according to each community’s contribution
to federal personal income tax revenues,8 according to the derivation principle of taxation. It should be noted that this
principle was inapplicable in the case of VAT since this tax, which concerns goods and not persons, cannot be localized.
The personal income tax transfers attributed to the communities are derived from the federal government’s personal 4 5 6
8 196 Theoretically, the communities derive from section 170, §2, of the Constitution their own taxing power. To date, this power exists only on paper since
its implementation comes up against, in particular, the absence of a sub-nationality in Brussels. The special act of 1993 stipulated that the fiscal
jurisdiction of the French-speaking and Flemish communities based on section 170, § 2, of the Constitution has not been rendered executable.
These two transfers come from the overall revenues of the federal budget (budgetary principle of the non-allocation of revenues). That a transfer is
financed by means of proceeds from VAT or personal income tax is, a priori, unimportant. However, the name given to a transfer has an
unrecognized financial implication. The federal gov...
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