Remember the loss in GDP (and thus also loss in both direct and indirect tax revenues) from the collapse of SABENA?
Somehow the government would have to make good for that too as at the end of the year their budget needs to meet its target no matter what and it's not like the have a thousand options to do so, do they?
That's what would happen indeed with this government.
Same as with SN who's trying to cut cost, the Belgian government is scraping off already so much that there's not much left to scrape.
However, there are methods to generate more tax revenue and ironically it would be very similar to the Ryanair method.
1. Fight illegal/black work, not by hiring more social inspectors, but by lowering the social contributions and tax rate on the lower income categories. Re-organize the purchase power of the people to relaunch the economy to increase vat income and make establishment of French, German and Dutch companies in Belgium more attractive by lowering the employment cost.
It's easy.
Employment/personal taxation: reduce the social contributions to a cap of 25% total spread 10/15% between employee and employer for all income tranches up to 40.000 euro.
Similarly cap the taxes to 20% on the income tranche up to 40,000 euro's (first 6000 exempt like now).
Above 40.000 charge heavily. The lower income families, which form a large majority of working people, would feel an immediate 20% increase of purchase power.
Self-employment/business taxation.
Reduce social contributions to 15% for business owners and self-employed, but instead of capping at 80.000 euro, go all the way without limit. Self-employed taxed at uniform rate of 25% but offered same social protection as employees. Severe fines and jailtime for fake self-employment for incomes above 40.000 euro.
Corporate tax rate 25% for everybody and offer social contribution incentives for every growth of net taxable income.
Increase fines for black work.
Advantages:
-no one works in black anymore while receiving welfare money, no point in doing that anymore.
=Less spending, more tax revenue.
-stimulates foreign businesses to come use Belgian manpower,
-stimulates Belgian businesses to hire and to expand and to earn more money,
-stimulates new entrepreneurs,
-Luxemburg/Switzerland effect, big employers like real estate/construction and banks thrive,
-Makes money turn, increasing VAT revenue.
-For airlines, more traffic
2. Impose traffic charges/vignettes to truck traffic going through Belgium, like in Switzerland. Through traffic doesn't spend money in Belgium.
3. Reduce welfare compensations from RVA/ONEM by 25% on the higher receivers, try to find work solutions for OCMW/CPAS people to launch them back into the working society. There are enough jobs where all you need is 2 hands. Form a workforce that works like a government temp (interim) office to be able to offer "job tastings".
I guarantee you, that if Belgium does this, in no time all the problems would solve themselves.
Low margin industries like aviation don't combine well with high tax environments, so as long as the government doesn't solve all the issues as marked above, airlines like SN won't thrive.
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