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Luxembourg delays fairer tax for singles until vote
fiscal reform

Luxembourg delays fairer tax for singles until vote

by Yannick LAMBERT 17.05.2021 From our online archive
Finance Minister Pierre Gramegna
Finance Minister Pierre Gramegna
Photo credit: LW/LT Archives

Luxembourg is set to delay a tax reform that would benefit singles which the government coalition promised until the country next goes to the polls in 2023, Finance Minister Pierre Gramegna has said in an interview.

Gramegna cited the pandemic as the reason for the delay of the long-planned fiscal reform that would see singles treated in the same way as married couples and people in civil unions, speaking to broadcaster RTL on Saturday.

Last year "would be a crucial year for the tax reform", Gramegna - a member of the pro-business liberals - had said in the early days of the three-way coalition which also includes the social democrats and the greens.

But the pandemic had thrown a spanner in the works, Gramegna said, and the coalition might not be able to honour its 2018 pledge that would "guarantee  a neutral tax model with regard to people's lifestyles" before the next vote.

Single employees in Luxembourg are subject to substantially higher taxes compared to couples, with the gap being above the average of the group of wealthy nations, according to the OECD.

The reform could also involve environmental taxes and measures to counteract the worsening housing crisis in Luxembourg. A more modest change in property taxes could already come in the next months however, Gramegna said.

There was no room to lower taxes because of high government spending to support businesses during the pandemic crisis, Gramegna said, though he promised that taxes would not rise either.

Labour Minister Dan Kersch of the social-democratic LSAP had called for a Covid tax during his party's congress in March, urging that those businesses that benefitted from the crisis be taxed at a higher rate.

Luxembourg introduced a carbon tax at the beginning of the year, and is also introducing a new tax on specialised investment funds.

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