Taxes emerge as the central political and budget battle facing Belgium’s federal government

Belgium’s next budget battle is likely to turn on a question that governments cannot avoid for long: how much more they can ask from taxpayers. Prime Minister Bart De Wever’s coalition must find €10 billion in additional savings by the end of its legislature, and more than 10% of that effort is expected to come from revenue.

That points toward a difficult debate over a possible broad VAT increase and further levies on investors. Pieter Timmermans, head of the Federation of Belgian Enterprises, recently complained that taxation had reached such a level that “The only thing we haven’t taxed yet in Belgium is the air we breathe.”

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The only thing we haven’t taxed yet in Belgium is the air we breathe.

The pressure falls particularly heavily on the Reform Movement, or MR, one of the coalition’s liberal right-wing parties. The governing agreement sets a limit, with one-ninth of the effort to come from revenue. A Flemish source cited in the discussion put the tax requirement at roughly €1.5 billion and said MR leader Georges-Louis Bouchez knows he must respect that provision.

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According to the government agreement, about 1.5 billion euros will have to be found through taxes. Georges-Louis Bouchez knows that he will have to respect this rule, even though everyone also knows that we will go through enormous crises in these discussions. Parties in the majority will leave the table. But in the end, we will find a deal. And I do not see how we will manage without an increase in VAT.

The same source predicted severe crises during the negotiations, including the possibility that governing parties could leave the table. Yet the expectation is that a deal will eventually emerge. The source also said it was difficult to see how the government could meet its target without raising VAT.

The issue has already caused a serious confrontation. When the parties failed to agree on the 2026 budget, the federal government began the year under provisional monthly budgets. The standoff followed Bouchez’s opposition to an initial plan for a general VAT increase and an index adjustment. The coalition eventually reached a compromise that De Wever himself described as “a stinking camel.”

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A stinking camel.