Municipal tax on motive power: the Constitutional Court rejects Wanze's appeal

The Constitutional Court, by its judgment no. 62/2026 of May 21, 2026, rejected the application for annulment brought by the municipality of Wanze against Articles 12 and 13 of the Walloon Region’s program decree of December 18, 2024, “concerning various measures regarding local powers and employment.” The extract of the judgment is published in the Belgian Official Gazette of September 11, 2026, page 49605, under reference C-2026/004196. The Court, presided over by Pierre Nihoul, ruled that the contested provisions do not constitute a new infringement of the fiscal autonomy of the municipalities.

An appeal against limited compensation

The municipal tax on motive power — a tax established by municipalities on engines, calculated according to their power — was abolished as of January 1, 2006, by Article 36, § 2, of the Walloon program decree of February 23, 2006, “relating to priority actions for the Walloon future.” In return, the Walloon Region had committed to paying municipalities full compensation for their loss of revenue, the liquidation modalities of which were established by Article 49 of the decree of December 10, 2009, “on fiscal equity and environmental efficiency.”

Articles 12 and 13 of the decree of December 18, 2024, which entered into force on January 1, 2025, replaced this mechanism: compensation is now only due “within the limit of available credits,” calculated on the basis of actual losses and reduced “pro rata” when the budget envelope does not allow for full compensation. Following a petition dated April 15, 2025, the municipality of Wanze, represented by Me Eric Lemmens and Me Elisabeth Kiehl, lawyers at the Liège-Huy bar, contested this reform.

Fiscal autonomy in question

The applicant municipality invoked, first, the violation of Article 170, § 4, of the Constitution, which reserves the regulation of municipal tax to the municipal council. The Court responds that the restriction of the fiscal autonomy of the municipalities stems from Article 36, § 2, of the decree of February 23, 2006 — which was not modified by the contested provisions — and not from the mere adjustment of the compensation mechanism. Consequently, the first ground is unfounded.

The second ground, based on Articles 10, 11, and 170, § 4, of the Constitution, criticized the texts for failing to define the notion of “available credits” and for granting the Walloon Government a delegation without minimum criteria. The Court dismisses this grievance: the notion refers to the budget adopted by the Walloon Parliament, and the distribution among municipalities must be carried out pro rata to actual losses, without undermining the balance between them.

A distribution framed by the budget

The third ground, in its first branch, compared the municipalities to other creditors of the Walloon Region, whose claims would not be reduced pro rata. The Court declared it inadmissible, as the applicant failed to set out the legal regime of these other claims. The second branch, which denounced a deprivation of democratic guarantee, was judged unfounded: the budgetary limits and the allocation of amounts are determined by a democratically elected legislative assembly.

The Court finally emphasizes that the compensation remains mandatory for the Walloon Region to pay for the benefit of the municipalities, and that the actual loss based on horsepower “is less and less an economically tangible taxable matter given the technological evolution since 2006.” For these reasons, it rejects the appeal.

Scope for Walloon municipalities

The ruling supports the budgetary trajectory of the Walloon Region for the 2024-2029 legislature, in the name of which local authorities are called upon to “participate in the budgetary effort.” It comes after a decree of December 19, 2025, has since repealed Articles 36 and 37 of the 2006 decree and established, as of January 1, 2026, a five-year exemption from the horsepower tax for new investments, with compensation also limited to available credits. For Walloon municipalities, the decision endorses a regime where the compensation for the abolition of the horsepower tax is no longer fully guaranteed, but remains subject to the budgetary means voted by the Walloon Parliament.

Official source: Belgian Official Gazette of September 11, 2026, p. 49605 — Constitutional Court, judgment no. 62/2026 of May 21, 2026, reference C-2026/004196.