Minister of Finance Gilles Roth confirmed to the Parliamentary Finance Committee on Tuesday morning that a single tax class will be introduced starting in 2028.
While MPs broadly welcome the reform for promoting greater fairness, concerns were raised over its financing.
MP Yves Cruchten of the Luxembourg Socialist Workers’ Party (LSAP) noted that neither the upcoming budget nor the multi-year financial plan, set for a vote in December, accounts for the cost of the change.
“We are really questioning how serious it is to present such a budget to the Chamber of Deputies when it will incur annual expenses of between €800 and €900 million”, Cruchten stated, arguing that responsible financial planning should reflect such significant expenditures.
MP Sam Tanson of the Green Party (Déi Gréng) also expressed disappointment that the reform did not go further to enhance fairness.
She remarked that she told the minister, “I would welcome it if Finance Minister Gilles Roth would sometimes listen a bit more to what opposition politician Gilles Roth used to demand.” Tanson pointed out that Roth had previously advocated for additional tax brackets for very high incomes – a measure not included in the current proposal. “Well, that’s not happening now”, she criticised.
Tanson did, however, welcome the government’s move to give greater consideration to children in the tax system.
Minister Roth indicated that an opening has been made for a so-called “early childhood deduction”, which would provide a tax deduction for every child between zero and three years old, regardless of whether parents are married, cohabiting, or single. “I found that this new idea was generally welcomed by all parliamentary groups”, Roth said.
Regarding the taxation of high incomes, Minister Roth defended the current framework, noting that the top tax rate is already set at 42% and that the coalition agreement does not provide for any alterations to this structure. “That was a political choice, and as Finance Minister, I adhere to it”, Roth stated.
If the planned timeline proceeds, Minister Roth intends to publicly present the draft bill for the tax reform on 6 January. It is consequently expected to pass through the Government Council in the coming weeks.
Following a year of parliamentary debate, the bill is scheduled for a final vote at the end of 2026. Should it pass, the reform would come into force in 2028, allowing the tax authorities one year to implement the necessary changes.
