Implicit Total Tax Rate

The Walloon municipalities, like all the Belgian municipalities and the Brussels agglomeration, can and have all established an additional tax to the personal tax. This tax is applied as a percentage, called “additional cents”, of the tax on natural persons due to the State. All inhabitants of the municipality liable for personal tax are also liable for this municipal tax, which is added to it and is collected at the same time. Each municipality sets the rate of its “additional cents” each year. The implicit rate of taxation, for a municipality or, at another level of aggregation, several municipalities, is equal to the ratio between the additional municipal tax(s) and the tax on natural persons due to the State. It is this rate, comparable between municipalities and levels, which is chosen as the key indicator. As a secondary indicator, is the average implicit tax rate per municipality (total tax, including additional tax/total taxable net income).