Frieden Defends Luxembourg Budget

by Ulrika Lomas, Tax-News.com, Brussels

13 December 2011

Luxembourg’s Finance Minister Luc Frieden intervened during a recent parliamentary debate to defend the country’s 2012 draft budget, insisting that the fiscal provisions contained in the bill form part of a longer-term plan to stimulate growth and to increase purchasing power.

According to the minister, on the revenue side, the 2012 budget reflects the government’s commitment to an “attractive fiscal policy”, and contains plans to maintain unchanged corporation tax and individual income tax in Luxembourg, and provides for the abolition of the crisis contribution.

During the course of his speech, Finance Minister Frieden presented the context in which the 2012 budget bill was drawn up, underlining the fact that the current situation in Luxembourg, in Europe, and indeed across the world raises many uncertainties.

Frieden underscored that the budget for next year must be seen as part of a long-term perspective, designed to stimulate growth and to increase purchasing power, by means of a high level of investment and a responsible social policy. It reflects on the one hand the effort so far undertaken to contain a significant increase in spending and on the other a commitment to invest in the future of the country, the minister continued.

Nevertheless, the minister reaffirmed the government’s aim to achieve a balanced budget in 2014, and to realize a surplus in 2015-2016, reflecting the “medium-term objective”.

Luxembourg’s 2012 budget provides for a deficit of 0.7% next year.

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