This study was commissioned by the Central Economic Council (CEC), and more particularly by the Special Advisory Commission ‘Construction’. It presents the sectoral results of a report that was produced in 2011 by the National Bank of Belgium and the Federal Planning Bureau. The federal government had asked both institutions to conduct a comprehensive study of a fiscal reform aiming at encouraging employment and supporting business competitiveness. As requested by the CEC, we comment here in detail the impact of a VAT increase without additional measures, on the one hand, and the impact of a VAT increase with transitional neutralization of the effect of that increase on the indexation. As regards the other measures examined, tables of results are annexed.
This study is devoted to the analysis of the main effects, on the Belgian economy, of various forms of tax shifting aimed at increasing taxes on energy and decreasing other taxes
(mainly taxes on labour). Results show that, if the increase in energy taxes is combined with a reduction of taxes on labour, a double dividend (rise in employment and decrease in energy consumption and CO2 emissions) can be obtained.