Lawmakers debate tax class reforms as public petitions garner over 15,000 signatures

Despite being listed as one of the major priorities of the new government, it currently looks as though tax classes 1 (single persons), 1a (single with children and elderly), and 2 (married and partners) will not be abolished before 2026. Nevertheless, a temporary adjustment of the 1a class has been promised in the meantime.

Very recently, two public petitions on the subjects gathered a combined total of more than 15,000 signatures, enough to trigger two separate debates in the Chamber.

Petition no. 2596 comes to the defence of single people, who, being attached to class 1, pay the highest tax rate in the Grand Duchy. A clear "injustice", according to the author of the text, who proposes taxing singles at the same rate as couples, that regardless of the already implemented adjustment of the tax scale on 1 January.

The second proposal, petition no. 2620, wants to abolish tax class 1a altogether. This class includes single parents, separated people, as well as widows and widowers. According to the author, "the transfer of tax class 2 to tax class 1a is no longer defensible in a crisis context and in a society where one in two marriages ends in divorce". At the same time, the petitioner acknowledges that any tax policy should ensure to not plunge single-parent households into a "precarious financial situation".

"We need a tax reform that represents equality"

Petitioner Ardacan Keten, who, as is always the case with petition creators, was invited to present and defend the petition, said that the amendment does not mean married couples should be taxed higher.

"We need a tax reform that represents equality. It is not about devaluing the advantages for married couples, but much more about questioning the system and adapting it to modern realities."

© Ardacan Keten / © chd.lu

Finance Minister Gilles Roth remarked that the government would like to go in the direction of individual taxation, "no matter what the individual situation of the taxpayer is, no matter whether the person is single, married, divorced, widowed or cohabiting."

The abolition of tax class 1A was the demand of the second petition, among which mainly single parents, widows and widowers fall. Petitioner Maria Ramrez Escano spoke of discrimination.

"Privileging married families compared to single parents is no longer acceptable. The tax system contributes to that injustice, because those families are often faced with additional financial and social challenges."

Roth responded that in 2025 tax relief would be in place for the category 1A, but that scrapping it all together would not be possible at this stage. By 2026, there would be a unique tax class taking into account individual family situations, "especially if there are children."