Our country once again proves that it is the world champion in tax burden

Of every €100 the employer sets aside for the wages of an employee without dependent children, €53 goes to the government in Belgium: €20.7 for taxes, €11 for social security contributions for the employee and €21.3 for national social security contributions for the employer. This is evidenced by the new report from the Organization for Economic Co-operation and Development (OECD) on the tax burden on wages. So this person has only 47 euros left out of the 100 euros. For those without children who earn a little more, the situation is even worse: they only have 41 euros left of the same 100 euros.

With this tax burden of 53 percent, our country ranks first among all 38 OECD countries, 5.2 percentage points behind Germany. In France it is only 47 percent and in the Netherlands 35.5 percent. The ratio increased 0.65 percentage points in 2022 compared to the year before, which puts us at a five-year high.

According to the Organization for Economic Co-operation and Development, the main explanation for this large increase is the fact that the tax tables were not indexed until after a delay, which means that people are automatically forced to pay higher rates given the high inflation. But this effect should wear off next year.

For a family with two children in which one partner works, the average wage is taxed at 37.8 percent. This puts us in third place after Finland and France.

The fact that one person is taxed more in our country is often mentioned, but the truth is more subtle. “The difference is only about children,” says Marc Delanote, professor of tax law at Ghent University. “Between an unmarried couple and a childless couple, in which both partners work at an average wage, there is no difference from a tax point of view: then the tax is collected at the same percentage. In other words, a person with dependent children will also be taxed less , just like a couple who have children.”

tax reform

“It is important to note that the OECD study only deals with cash payments,” says Marc Delanote, professor of tax law at Ghent University. Thus, it does not include forms of reward that are tax or semi-interest, such as company cars, options, guarantees, meal vouchers and environmental vouchers. However, both the OECD and the IMF have already indicated that Belgium is also Pioneering these kinds of special benefits.”

The main victims of such a high tax burden are ordinary income earners who are not entitled to these benefits. Tax reform, advocated by Finance Minister Vincent van Petegem (CD&V), would end many of those systems and reduce the tax burden. “With a budget effort of 10 billion euros, we can reduce the tax wedge by about 5 percent,” says Delanote, whose paper serves as the basis for this tax reform. But at the moment there is a lot of political opposition and the question is whether anything will move before the next election.