New Belgian government proposes reducing tax deductions for donations

Belgium could see the tax deduction for donations reduced from 45% to 30% if a measure set out in the new government’s draft coalition agreement passes into law.

Five Belgian parties reached a deal on January 31 to form the new ‘Arizona’ coalition government, led by Bart De Wever from the nationalist N-VA party.

In response to the proposed measure in the coalition’s draft agreement, the Impact Coalition – a group of associations, federations and umbrella organisations of which EFA member Fundraisers Belgium is a member – has shared the possible impact of such a deduction with the parties involved and is calling for its removal.

This has included sharing the message in the media and sending a letter, endorsed by more than 180 representatives of fundraising organisations in the country – including Fundraisers Belgium members and supporters.

The Impact Coalition describes the threat of a reduced tax credit for donations as ‘a cold shower, instead of a warm encouragement for all that work for the social interest’. It says that the deduction would impact the donations of more than one million households who annually transfer more than €350 million in donations to charity, with an average of more than €300 per family.

The ‘gain’ for the federal budget would be limited, it adds, bringing in just an estimated 50 to 55 million euros. However, the losses for the sector and for society would be far more significant, leading to a decrease in donations, and therefore in the resources of the organisations and institutions affected. In turn, this could have a negative impact on beneficiaries, as well as on employment and workload in the sector.

The Impact Coalition comments:

“The arguments were communicated to the parties involved and through the media. But unfortunately, this measure was not removed from the coalition agreement. However, a provision in the coalition agreement is not yet a legal measure: it would have to be amended in law (WIB92), thus get a majority in the House of Representatives. So the battle is not quite over yet.”

Picture by Patrick Robert Doyle on Unsplash