Under the motto, "for people, for upswing", Christian Social People's Party (CSV) Finance Minister Gilles Roth presented the 2027 budget to the Chamber of Deputies on Wednesday.
According to the minister, at the heart of the budget lies the aim of ramping up investment and offering targeted relief to households and businesses.
Much of the opposition's criticism, however, centres on the level of debt taken on by the state, projected to be over 29% of the country's GDP, a widening deficit, and a lack of strategy for the increased spending.
On Thursday, Minister Roth joined RTL Today in Kirchberg to answer questions on the impact of the modernised expat tax regime, what the budget means for families, and why the 2027 budget is, in his words, a "seized" opportunity for Luxembourg's economic recovery.
In January 2025, the government modernised Luxembourg's expat tax regime, which, according to the minister, was a request from Luxembourg business community, yielding "very good results."
He paid tribute to the country's international community, noting how the international and young workforce was boosting Luxembourg's financial sector.
In response to whether the modernised expat tax regime solely aims to attract new talent or benefits current expats too, the minister responded that, simply put, the expat tax regime allows for 50% of eligible gross annual income to be exempt from income tax, up to a remuneration base of €400,000 per year.
This, the minister said, is to attract the best talent and "to assure that they will be retained by these companies".
When asked about the most impactful change the new budget will introduce for residents next year, the minister pointed to an increase of people's purchasing power.
Lowering taxation, he said, had already been done and the government intends to continue in that direction through the single tax system, to be introduced in 2028.
The minister explained that the country is following a counter-cyclical fiscal policy by investing and increasing spending on, for example, mobility and infrastructure, the minister illustrated.
A counter-cyclical policy is a set of measures that goes against the grain of the economic cycle, implemented during economic downturn to stimulate economic recovery.
The government will invest "up to 4.5 % of our GDP [...] to show that Luxembourg is ready to be prepared for the future", Roth affirmed.
On the single tax class set to be introduced in 2028, the minister explained that this has been a widely-demanded change, by politicians and citizens alike, for the past four decades.
Referring back to the aim of boosting purchasing power, the minister elaborated that a shift to an individualised tax class system by default better reflects the modern realities faced by many of Luxembourg's households today.
The opposition has criticised the budget as a missed opportunity, to which the minister responded that it was, on the contrary, an opportunity seized for economic recovery, particularly against a backdrop of uncertain times and geopolitical tensions.
Minister Roth is convinced that the budget will boost economic growth and take the country into the future.
