The new federal government of Belgium, better known as the Arizona coalition, has presented its coalition agreement.
Led by Prime Minister Bart De Wever (N-VA), the coalition is focusing on a series of fiscal reforms and mobility measures that should strengthen both the purchasing power of working Belgians and the competitiveness of the economy. The government parties – N-VA, MR, Les Engagés, Vooruit and CD&V – have ambitious plans, but are also encountering strong criticism from the opposition and social organisations.
stimulate the economy
One of the key points of the new coalition agreement is the reduction of the tax burden on labour. The government wants to achieve this by increasing the tax-free amount, reducing the special social security contribution and strengthening the social work bonus. This would increase net wages, which should mainly benefit working Belgians.
In addition, the coalition is committed to a broader fiscal reform to stimulate entrepreneurship. The focus is on increasing purchasing power and making Belgium more attractive as an investment country. In this context, the rules for expats are being relaxed. For example, the tax-free allowance is being increased from 30% to 35%, the annual ceiling of €90.000 is being abolished and the minimum gross salary is being reduced from €75.000 to €70.000. The government hopes this will attract highly educated foreign employees and investors.
The investment deduction is also being adjusted. Companies that contribute to the energy and climate transition will receive an increased deduction. For investments in research and development, the regional certificate requirement will be abolished, and companies can be recognised as a research centre, which will ensure a more stable fiscal framework in the long term.
According to the government, these measures should make Belgium more competitive and strengthen the economy in the long term. However, critics argue that the reforms do too little to reduce the tax burden on the middle class and are mainly beneficial to companies and high incomes.
mandatory mobility budget
In addition to fiscal reforms, the coalition agreement pays a lot of attention to mobility. For example, the fiscal benefits for plug-in hybrids will be largely retained. The maximum deduction percentage of 75% will remain until the end of 2027, after which it will be gradually reduced to 65% in 2028 and 57,5% in 2029. Fuel costs for these vehicles will remain 2027% deductible until the end of 50.
A striking measure is the reform of the mobility budget. Companies that offer company cars are required to give employees a mobility budget. This budget can be used for alternative mobility options such as public transport, bicycles and shared cars. With this, the government hopes to broaden the mobility choices of employees and reduce traffic jams.
However, in Brussels, cuts are being made Beliris-resources, the federal fund that invests in Brussels infrastructure and mobility projects. This threatens to jeopardize the expansion plans for the metro network, among other things. Criticism of this cutback is heard especially in the Brussels Region, because mobility in the capital has been a sore point for years.
political composition
Although the Arizona coalition announces ambitious reforms, criticism is not lacking. Opposition parties doubt the feasibility of the proposed budget. There are fears that the reforms are insufficiently financed and that Belgium's debt position will deteriorate further.
In addition, the pace of reforms is considered too slow, particularly in the area of pensions. Critics say the government should have moved faster to tackle the ageing problem.
Some organisations and economists speak of missed opportunities. They believe that the coalition agreement does not implement fundamental structural reforms, while the Belgian economy is facing major challenges. The political composition of the coalition also raises questions. The government consists of parties ranging from left (Vooruit) to right-wing liberal (MR) and Flemish nationalist (N-VA), which could put pressure on internal cohesion.
Arizona Coalition: Ambitious
The Arizona coalition, which was installed on February 3, 2025, must maintain a complex balance between different political currents and regional interests. The coalition's name refers to the colors of the flag of the American state of Arizona, which correspond to the political colors of the participating parties: yellow for the Flemish nationalists (N-VA), blue for the liberals (MR), orange for the Christian Democrats (CD&V and Les Engagés) and red for the socialists (Vooruit).
The coming months will show whether the De Wever government can realize its ambitious plans and maintain sufficient support. In the meantime, criticism of the budget, the mobility plans and the internal cohesion of the coalition remains a major challenge.
