Luxembourg Government Revenues Up 13% Over 1 Year to €28bn

On Tuesday 28 January 2025, Luxembourg's Minister of Finance, Gilles Roth, presented the financial situation of the State as of 31 December 2024 to members of the finance and budget execution committees of the Chamber of Deputies (parliament).

As of 31 December 2024, central government revenues amounted to €28.4 billion according to the SEC 2010 European accounting rules. This represents an increase of 12.9% over one year.

At the level of Inland Revenue (ACD), the tax authority collected revenues of €14.5 billion at the end of the year, i.e. an increase of €1.9 billion (+15%) over one year. The largest increases were recorded at the level of corporate income tax with +€853.3 million (+34.1%), withholding tax on salaries with +€536.6 million (+8.9%), withholding tax on capital income with +€261.8 million (+32.8%) and the national withholding tax on interest with +€107.5 million (+188.9%).

The revenues collected by the Registration Duties, Estates and VAT Authority (AED) at the end of the year amounted to €7.8 billion. This represents an increase of €798.4 million (+11.4%) over one year. While value added tax and subscription tax increased by €739 million (+14.5%) and €90.6 million (+7.6%), respectively, compared to 31 December 2023, registration fees were down by €45.7 million (-19.6%) over one year.

The Ministry of Finance noted, however, that owing in particular to the package of measures to revive the housing market, the number of acts relating to real estate transfers as of 31 December 2024 was up by 6.6% compared to the same period in 2023.

Regarding the Customs and Excise Agency (ADA), total revenue amounted to €2.3 billion, i.e. an increase of €180.8 million (+8.6%) compared to 31 December 2023. On the one hand, excise duties continued to rise with +€21.5 million (+7.7%) on petrol, +€172.6 million (+16.8%) on manufactured tobacco and +€3.5 million on alcohol (+5.1%). On the other hand, excise duties levied on diesel fell by €23.2 million (-3.9%) over one year.

According to the ESA 2010, expenditure increased by 9% compared to 31 December 2023. The Finance Ministry said this reflects a "strong welfare state" with an increase in social benefits of €377.6 million (+14.6%) and "substantial investments in the country's future", which increased by €242.9 million (or 8%) over one year.

As of 31 December 2024, the positive jaws effect for 2024 was confirmed.

The central government balance showed a provisional surplus of €317 million. The Finance Ministry said this was "a clear improvement" of €948 million compared to 31 December 2023.

Taking into account expenditure not yet allocated to 2024, Finance Minister Gilles Roth commented: "We are now counting on a moderate central government deficit of around €300 million in 2024 - and this despite a difficult geopolitical and macroeconomic context. The current financial situation gives us more room for manoeuvre to continue our recovery policy and to better face the challenges of today and tomorrow. Even if a certain reserve is still required, I am cautiously optimistic."