The minister confirmed that the tax authorities are behind in processing tax returns, mostly due to the fact that people did not hand in their tax declarations by the due date. Digitisation of the process should, however, help speed up and better the whole procedure.
Statistics support the minister's claims, with more late declarations now than in 2016. Even in 2016, only 32.5% made it to Luxembourg Inland Revenue (Administration des contributions directes - ACD) on time, and this number dwindled further to a quarter of all declarations in 2019.
The Minister of Finance did however specify that the number of cases passing through the administration were not only growing in number, but they were also becoming ever more complex. In fact, the number of individual peoplefiling returns has more than doubled since 2002, with a total exceeding 280,000 individuals registered as employed.
A recent tax reform contributed to the rise, generating an additional 62,000 cases for the authority to process. Married non-residents with income generated in Luxembourg are now able to claim a tax return the same way residents can, however only if they file for one here.
Since 2013, when the government coalition was formed (DP, LSAP, and the Greens), the number of staff working in tax administration offices has continuously been updated to meet demands. There are currently 830 employees working in the tax department, with 43 additional employees expected to join this year.
In order to further facilitate the whole process for both taxpayers and the administration, Gramegna is looking towards a technological overhaul. Most business are already obliged to make their declarations electronically, and the minister hopes to make this a reality for the rest of the public soon. This digital streamlining will be part of the next tax reform.
These, in any case, are the various ways in which they are looking to curtail tax tardiness.
