Further strengthening of tax shift for low-income households

17 March 2017
Further strengthening of tax shift for low-income households

“This government prioritises on making working worthwhile again,” Minister of Finance Johan Van Overtveldt states. In this connection it has now also approved a new measure enabling the minister to further decrease the tax burden on low-income families with children without resulting in additional budgetary pressure.

The Tax shift There is a tax shift when a new tax is implemented or an existing tax is increased in order to reduce or get rid of another tax. The N-VA is a proponent of a shift of the burden on labour to that on consumption or environmental pollution, for example, but not of a tax that increases the total burden of taxation. tax shift resulted in, among other things, a modification of the tax brackets. This decreased the tax burden and primarily led to higher net wages for the lowest income groups. However, due to the existing tax mechanism, this also indirectly resulted in a decrease in the tax deduction for children.

“We now wish to strengthen the effects of the tax shift for the target groups that are the most sensitive to this through an adjustment to the tax mechanism,” Johan Van Overtveldt explains. “For example, there are families that are not able to make full use of the tax deduction for children because their income is too low. Starting from the 2017 tax year we will convert this non-used benefit into a credit that will effectively be paid back.”

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