State Tax Collections Down 25% in Q2 2020 due to COVID-19 Crisis

In its latest report, STATEC confirmed that the Luxembourg state's tax revenue dropped by 25% over one year in the second quarter of 2020.

The economic crisis triggered by the COVID-19 pandemic and associated measures taken by the Luxembourg government have inflated state spending, while revenues are slipping. In the second quarter of 2020, taxes collected fell by one-quarter year-on-year.

At the end of the first half of 2020, the state collected €1.1 billion less in taxes than last year, representing a sharp drop of 12.5%.

Whilst the balance sheet was already slightly negative in the first quarter (-1.8% over one year), the full blow was felt in the second quarter of the year (-25%).

Value-added tax (VAT) and excise duties also fell by around 35% in the second quarter of 2020.