In a book published by the Robert Krieps Foundation, which has ties to the Luxembourg Socialist Workers’ Party (LSAP), the former director of the Tax Administration, Guy Heintz, writes that after a crisis such as the Covid-19 pandemic, it is necessary to assess the budgetary situation of the State and the municipalities.
Heinz argues that while it may not be advisable to fundamentally overturn Luxembourg’s tax system, it will nevertheless be necessary to “tighten some screws”.
In the book, a dozen authors present their “key elements for a future [fiscal] reform”.
According to Heinz, if the state needs new revenues after the health crisis, a series of measures should be prioritised: First, the tax authorities should be given access to the data of banks.
Second, capital gains on shares in investment funds should be taxed. The exemption on dividends should be lowered from 50% to 40% and the accelerated depreciation on the rental of real estate should be abolished, as well as the favourable regime of the participation premium.
Finally, the former director of the Tax Administration proposes the reintroduction of the wealth tax for individuals, something which Heinz thinks will be “necessary” after the crisis.
