The VAT cut will not help Luxembourgers

This opinion was shared by the Luxembourg Consumer Association (ULC). According to its representatives, the VAT reduction, which is scheduled for January 1, will hardly affect everyday goods. They are already taxed at an ultra-low rate of 3%, which is not subject to the current change.

Three others rates will decrease: from 17%, 14% and 9% to 16%, 13% and 8% respectively. However, the government has not yet declared whether someone will stop potential fraudulent rate use by companies, what kinds of sanctions will be used and whether such a system will turn into a blessing of unprecedented margin for suppliers and sellers.

The cost of such an instrument will be 317 million euros, or almost 500 euros per resident. That’s a hefty sum for a concept that the ULC doesn’t think is practical. The Union believes that for a real increase in purchasing power, it is necessary to carry out a tax reform and make the tax system more adaptive to inflation.