The CGFP has given a cautious, conditional welcome to the government's planned tax reform, endorsing its general principles while warning that significant questions on household impacts must be resolved.

Following a meeting with Finance Minister Gilles Roth, the General Confederation of the Civil Service (CGFP) has expressed cautious support for the government's planned tax reform, though it insists several critical questions must be resolved to prevent additional burdens on households.

The union's General Secretary, Steve Heiliger, outlined specific concerns. A primary issue involves single-income households and couples where one partner earns more than three-quarters of the total income. The CGFP is awaiting detailed proposals from the Minister on how these cases will be handled.

Another important question concerns people who separate or whose partner dies: "Today, they remain in tax class 2 for three years, and if that tax class no longer exists, if there is only one tax class left, we at the CGFP naturally ask what will happen to these people?"

The government's current plan is to offer a 20-year transition period. However, this is deemed insufficient by the CGFP.

Additionally, the union reiterated several long-standing demands. It argues that the current €672 ceiling for deductible loan interest is outdated and should be increased. It also contends that adjusting tax brackets for only 6.5 index tranches is inadequate, calling for a correction of at least eight tranches to counteract "bracket creep."

To prevent this phenomenon from effectively raising taxes through inflation, the CGFP is demanding an automatic mechanism that adjusts tax brackets whenever a new wage indexation is triggered. "Anything else would be nothing but a hidden tax increase", the union stated.

The CGFP has given a general welcome to the principle of moving towards individual taxation, with Heiliger stating the union hopes the government will fulfill its promise to deliver a genuinely family-friendly reform.

The civil service union also expressed approval that a social dialogue is being conducted with Finance Minister Gilles Roth, noting that such constructive engagement is "not currently the case everywhere" within the government.

The planned tax reform is scheduled to come into effect in 2028, with an estimated cost of between €800 and €900 million.