Revenues from government taxes increase only 2 percent in 2008

In 2008, revenues from government taxes were just short of 136 billion euro, a 2 percent increase relative to 2007. Last year’s growth evidently slowed down relative to the period 2005-2007, when the annual increase totalled 8 percent.

Revenue government taxes

Revenue government taxes

Decline in fourth quarter 2008

Over the first three quarters of 2008, government tax proceeds were 5 percent higher than in the same period in 2007. In the fourth quarter, proceeds dropped by 6 percent. The decrease is entirely due to a combination of considerably higher proceeds in the fourth quarter of 2007 and the economic recession that hit the country in the last months of 2008.

Revenue government taxes

Revenue government taxes

Economic slowdown, lower tax proceeds

Tax revenues were curbed, because fewer houses were sold, a downturn in car sales and a stagnating consumption growth in the last months of 2008.

The introduction of two new environmental taxes (on airline tickets and packaging materials) and the tax rate increase on tobacco, wine, energy, lotteries and insurances provided some relief for the government.

Provinces and municipalities receive nearly 20 billion euro

Government tax revenues largely depend on the state of the economy, whereas tax revenues of municipalities and provinces are predominantly based upon the development of annual tax rates, as they receive a proportion of central government tax revenues each year.

Last year, nearly 20 billion euro landed in local government coffers. Revenues from taxes imposed by municipal, provincial and water board authorities amounted to over 10 billion euro in 2008.

Laurens Cazander