Aarschot ends café terrace tax, saving €1,000 annually

Sarhan Basem
Credit: vrt.be

Aarschot (Brussels Morning Newspaper) – The municipality of Aarschot decided to eliminate the taxation of outdoor cafe areas in the city. The tax collection went inactive during the coronavirus period, after which the government decided to permanently eliminate it.

In 2020, the city council of Aarschot decided to suspend the terrace tax due to financial hardships faced by catering businesses during the COVID-19 pandemic.

The tax remained uncollected for the next four years as establishments continued to struggle with the aftermath of the pandemic and the subsequent energy crisis. Mayor Gwendolyn Rutten (Iedereen Aarschot) has now announced the permanent abolition of the levy, stating that the move aims to encourage more hospitality businesses to set up outdoor seating areas.

“Now it was time to look at the levy again,”

says Mayor Gwendolyn Rutten (Iedereen Aarschot).

“And we have decided to permanently abolish the levy. In this way we want to encourage catering establishments to place a terrace.”

The abolition is already music to the ears of the cafe owners in Aarschot.

“In the hospitality industry, every saving is very welcome,”

says Rik Terlyn of Cafe De Flater.

“That means for us that we can save around 1,000 euros per year.”

Rik also hopes that the definitive abolition of the tax will convince other cafe owners to place a terrace.

“In our street, there are 5 catering establishments with terraces close to each other. And that looks fantastic. You notice that there is a lot of life in our street. That it is cozy, that people huddle together. And the more people can sit quietly and enjoy, the better.” 

What is the historical and economic context of Aarschot’s terrace tax policy?

Aarschot lies in the Flemish Brabant province of Belgium and maintains about 30,000 inhabitants while supporting some 80 registered hospitality venues. The outdoor seating tax, known as the terrace tax, previously cost establishments from €500 to €2,000 annually, depending on location and size.

The closure of Flemish catering businesses reached 15% during the pandemic, according to Belgian Catering Federation (Federal Horeca Vlaanderen) reports, while Aarschot witnessed a 10% reduction in active restaurants and cafes between 2020 and 2022.

The hospitality industry of Belgium faced additional stress due to a 130% increase in energy costs that occurred in 2022. Operation costs stood as the main concern among 60% of Flemish cafe owners, according to a 2023 government survey. Through its suspension of the terrace tax in 2020, Aarschot benefited local businesses by avoiding €50,000 in total expenses throughout four years.

The management of the levied tax in Leuven and Mechelen followed similar patterns, where they kept the tax intact yet activated pandemic-related assistance for businesses.

The permanent abolition matches the strategic economic plan of 2021-2026 by Aarschot because it focuses on supporting small businesses. Between 2020 and the present day, the number of restaurants with outdoor dining areas rose by 18%, according to city data, while commercial district traffic improved significantly. The municipal report from 2022 showed that terraces expanded tourism revenue by 12% compared to pre-pandemic numbers, thus encouraging the council to maintain incentives for their growth.

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Sarhan Basem is Brussels Morning's Senior Correspondent to the European Parliament. With a Bachelor's degree in English Literature, Sarhan brings a unique blend of linguistic finesse and analytical prowess to his reporting. Specializing in foreign affairs, human rights, civil liberties, and security issues, he delves deep into the intricacies of global politics to provide insightful commentary and in-depth coverage. Beyond the world of journalism, Sarhan is an avid traveler, exploring new cultures and cuisines, and enjoys unwinding with a good book or indulging in outdoor adventures whenever possible.
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