Proposition 52K1065

Projet de loi instaurant une réduction d'impôt pour les participations sous la forme d'actions dans des fonds de développement du microfinancement dans les pays en développement en fixant les conditions d'agrément en tant que fonds de développement.

General information ¶

Submitted by

The Senate

Submission date

Oct. 1, 2007

Official page

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Status

Adopted

Requirement

Simple

Subjects

share tax relief investment company direct tax venture capital tax on income microfinance microloan development aid

Voting ¶

Voted to adopt

Groen CD&V Vooruit Ecolo LE PS | SP Open Vld N-VA LDD MR FN VB

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Discussion ¶

May 15, 2008 | Plenary session (Chamber of representatives)

Full source

Mr. Speaker, colleagues, I take the floor to express my support for this proposal on behalf of our group and our whole cartel. We are relatively well in Europe, while a lot of people in the world are not well. It is a shame that so little has been done so far. Total development cooperation is approximately $50 billion a year. That sounds like a lot, but it is little if you compare that, for example, with foreign direct investment in China, which also amounts to $50 billion each year.

I think the government can do more. We are on the way to 0.7 percent, don’t you, Mr. Minister of Budget? For this purpose, we make large cash contributions for the first time, while spending more than 1 billion euros on genuine development cooperation. Therefore, it is not about repayment of loans, but about actual contributions in cash. That is the government’s commitment.

It is also possible to engage the private sector. This can be done in the form of poison. The proposal presented here is interesting in itself because it provides a tax deduction for people who invest in shares of development funds. These development funds are actually organizations that transfer that money to microfinance institutions, some kind of small banks or small financial institutions that provide very small loans in the developing countries themselves.

It is therefore about helping self-employed and SME business leaders in developing countries. Those who invest in such a development fund deserve an additional tax deduction.

The tax deduction is 5 percent, but I note that it is 5 percent per spouse. If you are home with two, this deduction goes up to 10 percent. However, a minimum deposit of 250 euros must be made in order to be eligible in this area.

What is also important for the people is that one has to hold those shares for 60 months, five years. If you do not keep them for five years, you lose the tax advantage. The tax advantage is then withdrawn.

Overall, I think this is a wonderful initiative. I would like to expressly thank our colleague, Senator Sabine de Bethune, for the initiative she has taken in this regard. I hope a lot of people will sign up for this. I think this is a very concrete measure that demonstrates how the private sector can contribute to development cooperation. It does not always have to come from the government. We need to be very critical about the use of government funds. We do much more for development cooperation than in the past, but it is clear that the private sector also has a huge responsibility in this. I think this tax measure will address this.

I would like to thank Mrs. Bethune for her initiative and express her all the praise and support from our group.

Mr. Speaker, dear colleagues, microfinance is a form of ethical investment, and ethical investment has always been of great importance for the Greens.

2005 was the year of microfinance and micro-credit. In 2006 we saw in the Senate a whole reflection on this with eventually a colloquium. This is the result of the bill, which we also support.

The importance of microfinance was recently demonstrated with the Nobel Peace Prize awarded to Professor Yunus, in 2006. Professor Yunus is the pioneer of microcredit as it is applied worldwide after his pioneering work in Bangladesh.

The World Social Forum in 2007 also called for decent work and implicitly also for the importance of microfinance as a lever for the poorest in our world to develop themselves and to undertake an economic activity.

By supporting microfinancing within the private sector by making it deductible from taxes, under the conditions already mentioned, we as Parliament give an important signal that ethical investment is very important. We also give the signal that in this way we also want to support the Millennium Goals, which are extremely important.

Dear colleagues, microfinance and microcredit often serve to support the poorest. The poorest are often women who undertake small economic activities and thus form their region, their own village, a piece of advance aid and also a support and beacon in their own village and in their own family.

It is important to pay attention to microfinance in rural areas, to make them sustainable and profitable, because there live the poorest. It is of utmost importance to continue efforts and to mobilise capital for funds that invest in microfinance institutions.

This bill is a good lever to contribute to this. Microfinancing itself is a good, powerful lever in the fight against poverty. It is one of the ways to ⁇ the Millennium Goals, the Millennium Goals for which we are currently seriously lagging behind.

Four billion people in this world are still excluded from the regular banking system, and poor people too often do not have access to financial services. Through these types of loans, they can expand small-scale economic activities to increase their income and protect themselves from risks.

It is a special instrument of development, which leaves the path of dependence and gives the poorest the opportunity to help themselves further and do well. It teaches them to fish instead of eating the fish they get. We will fully support this. We also want to contribute to the further development of this type of legislation.