Luxembourg’s tax administration is set for a significant digital transformation, following a unanimous vote in the Chamber of Deputies on Thursday morning. The newly adopted legislation aims to push the proportion of electronic tax declarations from the current 17% up to 85% by 2028. Nonetheless, taxpayers will retain the option to file their tax returns on paper if they prefer.
The overhaul addresses the fact that the existing IT infrastructure dates back to the 1970s and 1980s. During the debate, most opposition parties called on Minister of Finance Gilles Roth from the Christian Social People’s Party (CSV) to clarify the costs of the project. The new IT system will cost the state €226 million.
Minister Roth explained that the price tag consists of €193 million before VAT, with €94 million of that directly allocated to the IT solution itself, excluding VAT. He also highlighted that additional investments will be required for staff training and to adapt the entire system, as it is not enough to simply install new software but instead requires a holistic approach. Roth stressed that the advanced age of the current systems further complicates the project.
However, the modernisation project could face delays. A company has appealed against the public procurement process and, having lost in the initial court ruling, has now taken the case to appeal. According to the minister, a decision could be reached before the summer, but the final outcome remains pending.
