Businesses bear the brunt of significant deficits in the Brussels budget

While large companies such as Engie, Proximus and the NMBS want to halve the office space of their Brussels headquarters, the Brussels city council is increasing its tax on office space by more than 75% in the 2022 budget. “However, Brussels already has one of the highest taxes on offices in Belgium. Many companies leave Brussels every year and move to Flemish and Walloon Brabant. The Brussels policymakers have no answer to this exodus; on the contrary, they are accelerating this trend by wanting to squeeze companies like lemons,” says Mathias Vanden Borre, Brussels MP for the N-VA and municipal councillor in the City of Brussels.

Companies based in Brussels already pay on average no less than 30% more in municipal and regional taxes than companies located on the other side of the regional border. As of next year, companies with office space in the City of Brussels will have to pay almost EUR 17.5 for a square meter instead of the EUR 9.8 per square meter they had to pay this year. “The impact of teleworking is massive. This weekend, the De Tijd newspaper reported that major employers such as NMBS, Proximus, bpost, Engie, BNP Paribas Fortis and KBC are currently divesting a total of almost 250,000 square metres of office space. Institutional players such as the European Commission are also cutting back massively in their office buildings. A 75% tax increase in one year is dramatic and will accelerate the negative trend of leavers and office vacancies. In the short term, an additional 1 million m² of offices will become vacant, on top of the 1 million m² already vacant,” Mathias Vanden Borre notes.

The increase in teleworking will also have a significant impact on municipal finances. The Brussels City Council hopes to secure approximately EUR 48.5 million in revenue with the tax increase next year, which is EUR 10 million more than in 2020. In addition, the city administration expects that this revenue will increase by EUR 5 million annually. “The tax increase mainly serves to reduce the capital’s deficit. This year, the City Council expects a budget deficit of EUR 4.7 million. But I fear that this administration is counting its chickens before they hatch. Not enough consideration is being given to the increasing vacancy rate and the negative impact on the broader socio-economic fabric of Brussels,” Mathias Vanden Borre states.

“It is therefore crucial to anticipate as much as possible in order to prevent further damage to the Brussels urban fabric and to prepare the region for a new post-coronavirus reality,” says Mathias Vanden Borre. The N-VA is calling for the harmonisation of the municipal tax on office space at the regional level, thus making the Brussels office market more attractive for businesses. “But the attitude of the Region in this matter is (as so often) particularly passive. There is no vision for the future of offices in Brussels. I recently tabled a resolution in Parliament, but it was voted down for no good reason. The orchestra continues to play, but the water is running over the bulkheads in Brussels in the meantime,” Mathias Vanden Borre concludes.