Anglo Saxons call it ‘tax freedom day’ – theoretically, it’s the day you stop paying for the state’s expenditure and earn money for yourself. The effective tax rate paid by Belgians is now 45.06%, 0.95% higher than last year and 1.07% more than three years ago.
The Belgian average worker will work until 8 August to finance government spending (fiscal and social obligations). Within European Union, Belgium is the country that levies the most tax on employees, according to the Molinari Economic Institute, based on data from Ernst & Young and New Direction Foundation.
“The Belgian salary is taxed more than any other citizen of the European Union. Like last year, the undisputed champion of taxation is Belgium. Mandatory withdrawals will represent 60.25%, tax freedom will have to wait until August 8 this year,” adds the Institute.
In Europe, Cyprus (March 14), Ireland (April 24) and Malta (29 April) are the least taxed. In contrast, the average Austrian employees (July 23), French (26 July) and Belgium (August 8) suffer the highest rates of tax deducted at source in the European Union (excluding Croatia).
“The average Belgian worker – both one of the best trained and one of the most productive in the world – earns a net salary which puts it 10th among EU countries, but is, nevertheless, the most expensive to hire,” said James Rogers co-author of the study. “Therefore, if employers quit Belgium, it is not because employees are too expensive but because taxes and social charges are the highest in Europe.”
Sources La Libre Belgique, Molinari Institute, RTBF
Photo: Julien Jorge, Creative Commons