In a policy brief released 28 October 2026, VBO-FEB (Federation of Enterprises in Belgium) presented econometric evidence that Belgium’s declining wage share in GDP is driven primarily by elevated employer social security contributions and personal income tax wedges, not stagnant gross wages. The study compares Belgium’s tax wedge (52.7% for single average worker) against the OECD average (34.6%), highlighting the disincentive for labor-intensive investment and hiring. The analysis references the 2023 Tax Shift evaluations and the pending Federal Government coalition agreement on labor cost reduction.
Key Takeaways
- Structural Cost Disadvantage: Employer SSC rates of 25% plus sectoral fund contributions push total labor costs 18% above the Eurozone median, directly impacting location decisions for shared service centers and manufacturing.
- Policy Reform Imperative: The federation advocates a targeted reduction of employer contributions for low-to-middle income brackets, financed by broadening the VAT base and green taxation, to restore cost competitiveness without increasing budget deficits.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement