Subsidies and investment support for Belgian companies amounted to approximately €25 billion last year. That works out at about 4 percent of Belgium's gross domestic product (GDP) or national output. Two-thirds of the subsidies are wage subsidies to compensate for Belgium’s relatively high tax burden on labour. The figures have just been released by Belgium’s central bank, the National Bank.
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Belgium more generous than neighbours: business receives €25 billion in subsidies
Colin Clapson
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Two-thirds of the subsidies are wage subsidies to compensate for the high tax burden on labour. These include, for example, a partial rebate on taxes due on night and shift work, targeted reductions in social security contributions for certain groups including new labour market entrants and subsidies to companies that receive payment in the form of service cheques.
According to the National Bank, research shows 'mixed results' with regard to the effectiveness and efficiency of such subsidies.
Government subsidies to business are 1.5 percent higher than in neighboring countries and also higher than the average in the eurozone. These higher subsidies mainly serve to strengthen competitiveness. When wage subsidies are taken into account, the net tax burden on labour in Belgium is lower than in France and comparable to that in Germany.
Government spending has increased by 9.5 percent of GDP since 2000. Subsidies and investment support to companies account for 1.5 percent of that increase.