Van Bettighem: Tax on rental income should not be a taboo

During an interview on Financial Street, the investment exchange de Tejd & Lecault, Finance Minister Vincent van Bettieghem said that in the context of a major tax reform in the pipeline, there should be no taboo. According to him, the possibility of taxing real income from rental properties, for example, should also be considered, which is not the case at the moment. Today, the tax is calculated on the basis of the indicated cadastral income (ki), which has increased by 40%.

Van Pettigue also advocated fair and impartial taxation. “What is unfair, for example, is that costs or labor are too high,” van Bettighem explains. And that led to a lot of fanfare to have those charges dropped.”

On making the tax system more neutral, the minister referred to the Special Contribution to Social Security (BBSZ), a “crisis contribution” that dates back to 1994 and is now being phased out. “There is a distinction based on social structure,” says van Bettighem. “Sometimes one person is taxed more than a couple.”

The finance minister is convinced that a blueprint that will be on the table by next year can regulate the new tax system by 2030. “There is no intention to break existing contracts,” the minister said. With this scheme, a gradual transition should be possible.

During the speech leading up to the interview, Minister van Bettieghem stressed that sustainable investment is no longer a marginal concept. “The time when sustainable policy strategy was a one-of-a-kind selling proposition is over, it has become a requirement,” the minister says.

“If a company wants to be future-proof, it must now participate in this sustainable transition, and if a bank wants to invest with as little risk as possible, it takes sustainability into account,” van Bettighem continued. “Not only because the government is setting new standards, but mainly because large institutional investors and consumers are starting to demand them.”

Van Bettighem also confirmed that Belgium will mainly use the €5 billion it received from Europe to restart the economy after the Covid crisis to enable the transition to sustainability.

In our country, the European Marshall Plan has become a climate plan. As the federal government, we have firmly chosen to allocate more than half of the resources solely to projects that promote this sustainable transition.

Van Peteghem also explained that a lot of resources are needed to make the transition a success. “Many initiatives, but also a lot of money. If we do nothing, we will face the same problem in every budget round in the coming years: Where do we get the millions and billions needed within our budget to achieve our sustainable ambitions?

The Minister of Finance emphasized that there is no intention to obtain the necessary resources from the working middle class through taxes. It should be avoided completely that people only associate climate change with higher costs and a lower standard of living. It is important that people can join, because we will only be able to complete the transition successfully when we can convince people of the feasibility and affordability.

According to Van Peteghem, the Federal Corporation for Investment and Partnership (FPIM) plays an important role. “In order to stimulate innovation and economic growth and accelerate the transition towards a sustainable economy, we have been systematically enhancing the effectiveness of FPIM in recent months.”

In addition, Van Peteghem expects a lot from the transformation fund. This fund was created to stimulate economic growth after the Corona crisis and to support the transition to a sustainable economy. The fund will be able to draw on SFPI’s expertise to support Belgian companies through direct participation and investments in funds aimed at transitioning to sustainable business.

The federal government itself is investing €750 million in the fund, which will be bolstered with resources from institutional investors such as pension funds and insurance companies.

However, private investors will also participate in the turnaround fund in due course. My goal is to give everyone the opportunity to help rebuild the country and thus also help build the sustainable transition that our country and our economy must make. “Anyone who invests in this fund will invest directly in the sustainable future of our country,” the minister said.