The Alternative Democratic Reform Party (ADR) has voiced strong objections to Finance Minister Gilles Roth’s proposal for a simplified single-tax bracket system in Luxembourg. While welcoming tax relief for unmarried individuals, the party warns the reform would disproportionately burden single-income families.
The proposal has garnered broad cross-party support despite some technical concerns. However, ADR MP Fred Keup stated his party has “a very big problem” with the plan. Keup acknowledged the benefits for unmarried taxpayers but argued single-income couples could face thousands in additional taxes, which he characterised as undermining the “traditional family model”.
Finance Minister Roth defended the reform, noting the current system – unchanged since the 1960s – has provided significant advantages to single-income households with stay-at-home spouses. The government aims to modernise the tax structure to reflect contemporary societal realities. A 20-year transition period would cushion the impact for adversely affected taxpayers.
The Green Party (Déi Gréng) and Pirate Party have emphasised the need for enhanced support for families with children. Finance Minister Roth acknowledged these concerns, proposing potential tax credits or child benefits while firmly rejecting any increases to higher-income or capital gains taxes.
According to MP Franz Fayot of the Luxembourg Socialist Workers’ Party (LSAP), MPs David Wagner (Left Party) and Sven Clement (Pirate Party) had previously called for greater tax fairness. In response, Roth reportedly reiterated that the coalition agreement between the Christian Social People’s Party (CSV) and the Democratic Party (DP) rules out tax hikes.
To finance the reform – projected to reduce annual revenues by €800-900 million – Roth outlined a compensation plan. This includes delaying the tax table adjustment for 2.5 pending wage indexations and potentially deferring adjustment for 1-2 future indexations.
The proposal enters a crucial consultation phase on Tuesday afternoon, when Roth presents it to the General Confederation of the Civil Service (CGFP), the Independent Luxembourg Trade Union Confederation (OGBL), and the Luxembourg Confederation of Christian Trade Unions (LCGB). Following summer discussions, technical work will begin in September to draft legislation, with the Minister targeting 2028 for implementation.
