The “carat tax”, the special tax regime introduced in 2017 for the diamond sector, is bringing in much less than the Federal Government had initially expected, De Tijd and L’Echo reported on Friday.
The first evaluation report of this tax reveals that for the 2020 tax year, the country’s 1,200 or so diamond dealers paid €28 million in taxes – less than half the €70 million a year that the Michel government was counting on.
In the first few years, the special regime has served its purpose. For the tax years 2017 and 2018, the carat tax brought in €79.8 million and €99 million respectively, significantly higher than the €27.7 million and €29.1 million collected in 2015 and 2016, when diamond dealers were taxed like other companies.
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But even before the covid crisis, tax revenues fell to €36.1 million and €28 million in 2019 and 2020 respectively. According to the report, the main reason for the collapse of tax revenues was the bankruptcy of a group of companies after 2018.
These diamond companies alone had paid €55 million of the €99 million in taxes paid in 2018. Since the introduction of the carat tax, the number of taxable diamond companies in Belgium has decreased from 1,445 in 2017 to 1,220 in 2020.
