commission on fiscal imbalance 合集

To avoid the harmful impact that a region would

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Unformatted text preview: , the Brussels region obtains a compensatory transfer. TABLE 4.4 SIMULATION OF A SAFETY NET APPLIED TO THE BRUSSELS REGION IN 1994 (000 000) 1991 1992 Total regional taxes 8796 9249.3 Inflation 3.6% 4.2% Safety net Sources: Tax authorities and Bayenet et al. (2000). 1993 9543.3 2.4% - 1994 9524.4 1995 9208.2 1996 10186.7 1997 9849.4 1998 11804.7 1999 12321.1 2000 14286.5 263.83 580.03 0 0 0 0 0 This simulation reveals that, had the safety net existed in 1994, it would have functioned the first two years. In subsequent years, because of the non-indexation of the reference amount, the safety net would no longer have been effective. If we examine total regional tax revenues in 1997, we see that real growth in revenues is negative and that real revenues are lower than in 1993, despite which the Brussels region would not have been compensated. The same calculation has been made with respect to the Walloon and Flemish regions. In both instances, the safety net is inoperative since revenues continue to grow in these regions. We can conclude that the concept of a safety net is certainly necessary, but only in respect of the Brussels region, and that its final design makes it unsuitable to fulfil its objective. This facet of budgetary neutrality concerned the federal government and the regions. We will now describe budgetary neutrality as it pertains to the federal government, the regions and the communities, i.e. compensation stemming from the regionalization of the radio-TV fee. In keeping with the principle of budgetary neutrality, the communities continue to collect the radio-TV fee (in exchange for compensation), the entire amount of which is repaid to the regions according to the location of taxpayers. In exchange for the additional revenues, the regions’ personal income tax transfers are reduced by the average amount of radio-TV fee revenues within their territory between 1999 and 2001, expressed in 2002 BEF and linked to inflation in 67 subsequent years. The amount recovered by the federal government through this reduction in the personal income tax transfer is then transferred to the communities. If real revenues from the radio-TV fee change faster or slower than inflation, it is the regions that will feel the budgetary impact. 67 216 Section 17 of the special act of July 13, 2001, inserting a section 33(a) in the special financing act. Commission on Fiscal Imbalance d) The fight against harmful tax delocalization The agreement of October 16, 2000 warns the regions against the risk of fiscal delocalization. To avoid the harmful impact that a region would sustain should unhealthy tax competition arise, various measures have been put forward. The measures adopted pursuant to the Lambermont agreement vary according to the mobile or immobile nature of the tax base of the tax considered. Taxes in respect of which the tax base is immobile, e.g. the real estate tax, the tax on the opening of drinking establishments, the tax on automatic amusement devices, and the tax on gambling an...
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This note was uploaded on 03/06/2013 for the course ECON 220 taught by Professor Paulo during the Spring '13 term at University of Liverpool.

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