commission on fiscal imbalance 合集

C other taxes the new law governing financing invokes

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Unformatted text preview: n on Fiscal Imbalance b) Personal income tax: broader autonomy in respect of margins As Valenduc writes (our translation), “the power of the Regions to establish additional taxes or rebates has been broadened and the preliminary agreement procedure has been replaced by an obligation to first communicate with the Minister of Finance and a specific mission of advice giving assigned to the Court of Accounts.” However, the autonomy of the Regions must reflect a framework guided by a number of principles. The Regions may not modify either the tax base or the tax calculation established by the federal government and they continue to operate on the margins, although this margin has been broadened through additional taxes or rebates, in the form of proportional or lump-sum tax credits that may or may not be differentiated by income bracket. These additional taxes or rebates may not, however, reduce the progressive graduation of the tax, bearing in mind the array of provisions that determine it up to the basis for calculating additional taxes. The legislation states (our translation) that “the principle of progressive graduation must be understood as follows: as taxable income increases, the ratio of the amount of the reduction and the amount of personal income tax due, before the reduction, may not increase or, as the case may be, the ratio between the amount of the increase and the amount of the personal income tax due, before the increase, may not diminish.” Moreover, they may not exceed 3.25% until the 2003 taxation year, and 6.75% starting on January 1, 2004. The Flemish government is expected to make use of its authority to grant rebates. The special law stipulates that “the Regions exercise their jurisdiction in respect of general tax reductions or increases, additional taxes or tax reductions without reducing the progressive graduation of personal income tax and at the exclusion of any unfair tax competition” (our translation). c) Other taxes The new law governing financing invokes the principle of non bis in idem when it stipulates, in section 4, that “the exercising by the Regions of fiscal jurisdiction […] must comply with the principle aimed at avoiding double taxation.” 5. CONCLUSION: HAVE WE REACHED THE END OF THE FEDERALIZATION OF BELGIUM? Have we reached the end of the federalization of Belgium? We can examine this question from the standpoint of jurisdiction and that of taxes. 5.1. Jurisdiction First, from the standpoint of jurisdiction, it should be noted that until very recently, i.e. 1998 or 1999, the Frenchlanguage parties were unanimous in refusing any new Community-based discussion, essentially out of a concern for protecting the federal nature of inter-individual solidarity from which French-speakers benefit. The main issue, as noted earlier, is social security, but also the progressive graduation of income tax and the method of establishing salaries. The Commission for State Reform of the Flemish Parliament adopted five avenues for concrete reform (Docquier, 1999, page 20; Van Den Brande, 1988, pages 4-5): ♦ reduce Belgium to two federated entities, i.e. Flanders and Wallonia, with a special status for...
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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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