Central government revenues are up by 3.8% in February 2021 compared to February 2020, just before the first lockdown.
Both the government and the Chamber of Deputies are pleased about this development.
Revenues are €100 million more than in February 2020, before the outbreak of the coronavirus crisis in Europe.
Last year, the deficit amounted to -€189 million in February. Twelve months later, it is -€117 million.
Current expenditure, both ordinary and Covid-related, is up by 1.6% compared to 2020.
The Minister stated that this is a good balance between income and expenditure. But it must be assessed with caution, according to MP André Bauler, chairman of the Finance and Budget Committee, who stressed that “it is too early to celebrate”.
Bauler does believe that a certain recovery can be expected in 2021. While the recovery may be “a little more modest” than expected in 2020, Bauler pointed out that the decline in Luxembourg’s GDP of 1.3% is less severe than previously expected.
Direct contributions have risen by almost 10% (9.5) - which amounts to €1,650 billion.
According to Bauler, there is an increase of almost €50 million in salaries as well as a clear increase in capital income (from €26 to €142 million euros). A slight increase in wealth can also be observed.
However, according to MP Diane Adehm from the Christian Social People’s Party (CSV), it is also evident, particularly at the level of social charges, that companies are not doing so well in Luxembourg.
Adehm pointed out that the payroll tax paid by companies in the country has decreased by €55 million. This shows, according to the MP, that the Grand Duchy’s companies are struggling. She stated that it will be interesting to see how this situation develops in the future.
Only the revenue of the Customs and Excise Administration is down by almost 18% to €253 million. The main reasons for this fall are teleworking and the CO2 tax, which have led to a decrease in the number of people using petrol stations.
In particular, petrol consumption fell by 20 million litres and diesel consumption by 68 million litres – a significant decrease which does have an impact on the revenue generated.
The decline in non-residents visiting and using the country’s petrol stations (“fuel tourism”) has also led to a fall in the sale of alcohol and tobacco, according to the report.
