No indexation of some tax limit amounts: an invisible tax increase?
No indexation of some tax limit amounts: an invisible tax increase?
April 2023 – All amounts used in personal income tax are indexed annually. Consider, for example, the limit amounts for tax brackets, the marriage quotient, professional expenses, and so on. Yet, not all amounts increase with longevity. And that creates an invisible tax increase.
Already in 2021, the federal government decided to freeze the indexation of a number of tax reductions for income years 2022 and 2023. These include the maximum amount for pension savings (990 / 1270 euros), long-term savings (2350 euros) and the maximum amount of (exempt) dividends (800 euros) for which you can recover withholding tax (RV).
However, in addition to this temporary indexation cap (for 2022 and 2023), the government also introduced a permanent indexation cap. This is the case, for example, for the maximum amounts of the housing bonus (1520 / 2280 euros) in Flanders and Wallonia.
Another example is the (compulsory) flat rate for commuting expenses deduction. This amount has not been indexed for over 30 years! In 1992, the flat rate was set at (converted) 0.15 euros per kilometre. Clearly, this allowance has long since ceased to be sufficient to cover increased fuel prices and insurance, maintenance and repair costs.
Could it be that legislators in our country are using this non-indexation as leverage towards green business mobility? After all, the same flat rate for travel by bicycle does adjust to life expectancy (€0.27 per kilometre for income year 2023). This indexation of the bicycle allowance was inserted in an economic recovery law of 2009.
On the other hand, however, other types of ecological travel (on foot, by scooter, electric moped, etc.) remain stuck at the flat rate of 0.15 euros per kilometre. So it is searching for the logic of these measures....