Finance minister (DP) on 24 July presented the Luxembourg as of 30 June 2023. Here are a few key figures to note.
€12.893bn in revenue, +17.9% in spending
The state has seen €12.893bn of revenue, an increase of €665m (or 5.4%) compared to the same period in 2022.
Its expenditures have also gone up, climbing from €11.126bn in 2022 to €13.121bn in 2023. That’s an increase of €1.995bn, or 17.9%. The finance ministry in its press release noted that the “sharp increase” in spending is due to several factors, such as aid to households and businesses in response to the energy crisis. The Energiedësch and Solidaritéitspak 1 and 2.0 packages have amounted to a total of €942m as of 30 June, said the ministry.
Taking revenues and spending together, the deficit comes to €228m.
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However, since most of the measures of the Solidaritéitspak 3.0--which was approved at the end of June--have not yet come into force, the spending related to this solidarity package will impact public finances later this year and in 2024.
“We are facing substantial expenditure related to the measures resulting from the Solidaritéitspak 3.0. Therefore, it is to be expected that the central government deficit will continue to widen further until the end of the budget year, while remaining in line with the projections established under the Stability and Growth Programme (SGP),” said Backes in the ministry’s press release. “I will continue to follow a far-sighted and responsible budgetary policy, ensuring that the evolution of public expenditure is kept under control at all times.”
As of 30 June 2023, Luxembourg’s public debt amounted to €22.2bn--a debt ratio of 27.1%, noted the press release. However, a €2bn bond issuance was repaid on 10 July, bringing the country’s public debt down to €20.2bn (24.7% of GDP).
Tax revenue: €6.4bn, €3.5bn, €1.03bn
The combined revenue of Luxembourg’s three tax authorities reached €10.9bn at the end of the first half of 2023. This is an increase of €590.7m (or 5.7%) compared to the first six months of 2022.
The Administration des contributions directes (ACD), or the Luxembourg Inland Revenue, saw revenue of €6.403bn--an increase of €674.5m (11.8%) compared to last year. The finance ministry said this was mainly due to a “significant increase” in corporate income tax, which increased by €198m and was mainly thanks to balances collected relating to previous fiscal years.
On the other hand, the Administration de l’enregistrement, des domaines et de la TVA (AED), or the Registration Duties, Estates and VAT Authority, had revenues of €3.47bn as of 30 June 2023, a decrease of €162.8m (or 4.5%) compared to 2022. According to the ministry, this decrease is due to the slowdown in the real estate market and a decline in revenue from registration fees. VAT revenues did see an increase of 2.8% (€70.1m) compared to 2022, noted the press release, thanks to an improvement in households’ purchasing power.
The Administration des douanes et accises (ADA), or the Customs and Excise Agency, saw revenue of €1.026bn. This is an increase of €79m, or 8.3%, compared to 2022.
€1.6bn of public investment
The finance ministry also noted that the indexation and recruitments carried out by the state led to an increase of €285m (or 10.4%) in expenses related to remuneration paid by the state during the first half of 2023. Operating costs rose by €90m (10.2%).
Direct and indirect public investments also saw a “marked growth,” said the finance ministry, reaching a total of €1.6bn during the first half of the year--an increase of €344m (28%) compared to 2022.
Expenses related to support for Ukraine
The government has so far spent €188m on expenses associated with Russia’s full-scale invasion of Ukraine, said the finance ministry, which mainly includes military equipment and welcoming refugees.
€228m has been committed to the country’s guarantee scheme for companies in connection with the consequences of Russia’s war in Ukraine--90% (€205m) is guaranteed by the state, said the ministry.
€368m for social security, €98m for municipalities
The finance ministry noted that state transfers to social security increased by €368m (or 13.2%) and by €98m (11.8%) for municipalities.
Find more details of the government’s finances .