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Unformatted text preview: Brussels and the Germanspeaking Community; ♦ place the Flemish and French-speakers on an equal footing at all levels of power in Brussels; ♦ transfer new fields of jurisdiction to the Regions, including the health insurance and family allowance sectors in the realm of
social security, railway infrastructure and the operation of the railways, scientific policy and foreign trade; ♦ transfer to the Flemish Region administrative supervision over municipalities with special language status on the outskirts of
Brussels and in the small Fourons (in Dutch: Voer ) region; ♦ broaden fiscal autonomy through the complete or partial regionalization of personal income tax. In exchange for broader means for the Communities, i.e. for education in the French Community, a number of the
Flemish demands mentioned earlier were met in the Spring of 2001: guaranteed participation in all levels of power in
Brussels (or at least financial incentive for that purpose), new transfers of jurisdiction over foreign trade and agriculture,
administrative supervision over municipalities with special language status on the outskirts of Brussels and in the small
Fourons (in Dutch: Voer) region, and the broadening of fiscal autonomy.
However, no component of interpersonal solidarity has been transferred: the progressive graduation of tax has remained
largely intact, and social security continues to fall under federal jurisdiction, including health insurance and family
allowances. One might think that the Flemish parties will go back onto the offensive in this respect. In early August, the
189 Commission on Fiscal Imbalance press, for example, mentioned Walloon laxity concerning exclusion from the right to unemployment benefits. The
Walloon agency in charge of managing the unemployed appears to be less prompt than its Flemish counterpart in
denouncing to the federal agency that pays unemployment benefits jobless individuals who refuse jobs that satisfy
predetermined criteria. This is one of the paradoxes of the Belgian system in that the management of the unemployed is
part of employment policy, which is regionalized, while the payment of unemployment benefits is part of social security,
which falls under federal jurisdiction. Similarly, health policy is regionalized but the funding of health care relies, by and
large, on social security, …which is federal. 5.2. Taxes
The autonomy in respect of margins of the Regions has become effective from the standpoint of personal income tax.
However, the Regions enjoy no fiscal autonomy with respect to corporation tax or value-added tax (VAT).
As for VAT and excise tax, a European framework is imposed on Belgium and revenues from VAT are already
apportioned among the Communities, although the reference of Community allotment to the tax is rather artificial. Given
the size of the country, it is easy to imagine that differentiated taxes would give rise among individuals to trans-regional
purchases, as is now the case in border areas. This would not hav...
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