* Contributions to the social security system
Sources: National Bank of Belgium, National Accounts Institute, National Social Security Office
The chemicals and life sciences sector makes a significant contribution to the federal, regional and local public finances through the taxes it pays. To give a balanced picture of the sector’s contribution, benefits from subsidies and tax incentives are also taken into account.
In 2017, companies and employees in the chemicals, plastics and life sciences industry contributed more than €5 billion to the state budget net of subsidies and tax incentives, equivalent to 27% of the sector’s value added in 2017.
The main contribution comes from companies’ social security contributions (€1.9 billion in 2017). These help to finance the social security system, and account for 37% of the sector’s total net contribution to the state.
The sector’s 92,000 workers also contribute to the state budget through their individual social security contributions (€735 million in 2017) and personal income taxes (an estimated €1.5 billion in 2017).
Corporate taxes are also an important source of state financing : the sector paid €1.6 billion in 2017. Corporate taxes on profit amounted to €1.3 billion after tax incentives, with the balance accounted for by environmental, property and other taxes on production activities (€157 million in 2017). Pharmaceutical distributors in Belgium also pay an annual tax on the sale of pharmaceutical products on the Belgium market (€194 million in 2017).
In addition, the sector contributes indirectly to the state budget through the indirect taxes and additional levies it pays. For example, as an intensive energy consumer, the industry pays significant taxes on energy through its electricity bill, such as the federal levies on electricity and gas, and increasing additional levies linked to renewable energy. In the absence of consolidated official public data, these sums have not been taken into account.
On the other hand, the sector received tax incentives on wages and subsidies, particularly related to R&D and shift work, worth an estimated €583 million in 2017. These incentives are crucial to maintain and enhance the competitiveness of the chemicals, plastics and life sciences industry in Belgium.
Overall, every employee in the chemicals and life sciences industry contributes €57,028 to the state budget compared with €35,993 for the manufacturing industry as a whole.