Xavier Bettel, the new Prime Minister of Luxembourg has presented a Government Declaration outlining details of plans to reform taxation in the Grand Duchy to the country’s Chamber of Deputies. The Government wants to set up a consultative tax committee for advising the Finance Minister on national and international tax matters, to improve the Luxembourg’s fiscal competitiveness and attractiveness, and to preserve its ratings.

Additionally, the Government disclosed plans to observe the various tranches in the progressive income tax scale, particularly with a view to addressing the phenomenon of so-called middle class belly. The comparatively heavy tax load imposed on middle class income earners, arising as a result of a particularly steep rise in the progressive income tax curve.

The Government said that it would strive to maintain the super reduced VAT rate of 3 percent.