Belgium's national budget will enjoy a windfall in 2024 thanks to an influx of requests to regularise undeclared income before 1 January 2024, which was the final deadline to do so without facing legal consequences.
A total of €894,252 million in undeclared income was regularised in 2023: over four times as much as the €208.8 million declared in 2022. This vast increase is largely due to the end of the "déclaration libératoire unique" procedure (DLU), which allowed for the regularisation of undeclared income without penalisation for failing to do so until that point.
There were 606 regularisation requests in December alone (worth €533.9 million), accounting for more than half of the total 1,024 requests throughout the year.
As a result, budgetary revenue will be twice as high as expected, jumping from a predicted €130 million to €260 million.
"The many measures that the government has taken in the fight against tax and social fraud are paying off," stated Finance Minister Vincent Van Peteghem (CD&V). "Once again it is clear that our approach in the fight against tax fraud works, and that we are working towards a fairer and more just tax system where everyone pays their fair share."
Impunity rules
Critics are not so sure the DLU has been such a noble effort. Although the mechanism entails a fine for previously failing to declare income, its appeal for would-be tax evaders lies in the legal immunity it offers.
The current DLU came into effect in January 2016 and is the fourth of its kind. The procedure allows taxpayers who have evaded tax to regularise their situation and benefit from a criminal amnesty. Rather than face prosecution, the person in question receives a fine which in serious cases can reach up to 75% of the amount declared.
When €2oo million was declared through the DLU in 2022, Vooruit Flemish MP Joris Vandenbroucke denounced the system as a way for tax fraudsters to regularise formerly criminal activity without facing any serious consequences. "It's not fair," he said at the time. "Vooruit advocates zero tolerance for fraudsters and so we are closing the door on regularisations for good next year. It is now up to Justice to step up and prosecute and punish tax fraudsters."
The DLU was never intended as a permanent framework. The Federal Government reasserted its temporary nature in its coalition agreement in 2020, and the Parliament voted to abolish it. The deadline that has just passed thus marks a finite end to the procedure.
