Gilles Roth, Luxembourg's Minister of Finance; Credit: © SIP / Claude Piscitelli

On Monday 7 October 2024, Luxembourg's Minister of Finance, Gilles Roth, presented the financial situation of the State as of 30 September 2024 to members of the finance and budget execution committees of the Chamber of Deputies (parliament).

As of 30 September 2024, central government revenues amounted to €21.1 billion according to the SEC 2010 European accounting rules. This represents an increase of €2.6 billion - or 14.1% - compared to September 2023.

At the level of Inland Revenue (ACD), corporate tax increased by €715.1 million (42%) compared to September 2023 to reach €2.4 billion. Municipal business tax rose by €253.2 million (29.1%) over one year. Tax withheld on salaries similarly increased by €471.9 million (10.9%) and amounts to €4.8 billion.

The Ministry of Finance attributed this increase in revenue to the effect of the energy tax credit and the adjustment of the income tax scale by four index-linked brackets on 1 January 2024.

The Registration Duties, Estates and VAT Authority (AED) generated revenues of about €5.7 billion. More specifically, value added tax (VAT) increased by almost €382 million (9.9%), partly as a result of measures to support household purchasing power. Subscription tax saw revenues rise by €58.2 million (6.5%) compared to the third quarter of 2023. The ministry said this reflects the "good performance" of the financial markets during the first two quarters of 2024.

Commenting on the drop in registration fees (-€47.5 million over one year), the ministry noted that the administration has had more acts with real estate transfers since the vote on measures to revive the housing market.

Concerning the Customs and Excise Agency (ADA), excise duties on road diesel (including CO2 tax) fell by €23.5 million (5.3%) compared to September 2023. At the same time, excise duties on manufactured tobacco increased by 23.2%.

At the end of the third quarter of 2024, central government expenditure had increased by €1.4 billion (7.4%) compared to the same period in 2023.

The ministry said that, with government spending increasing less quickly than revenue (+7.4% vs. +14.1%), the "scissors effect" is now positive for the first three quarters of 2024.

Minister Roth commented: "The trends of recent months are confirmed. The country is returning to growth. The government's recovery policy is starting to be felt."