POLITICS & INSTITUTIONS - POLITICS

Fiscal policy

Bofferding says covid tax still on the table



The interior minister, Taina Bofferding, revived the idea of raising the tax rates on profitable businesses, at least temporarily, to help pay down the country’s post-pandemic public debt. Library picture: Taina Bofferding speaks at a press conference, 10 June 2021. Matic Zorman

The interior minister, Taina Bofferding, revived the idea of raising the tax rates on profitable businesses, at least temporarily, to help pay down the country’s post-pandemic public debt. Library picture: Taina Bofferding speaks at a press conference, 10 June 2021. Matic Zorman

LSAP cabinet minister Taina Bofferding suggested hiking property taxes and the rates on businesses that earned good profits during the covid crisis in a radio interview over the weekend.

Taina Bofferding, the interior minister (LSAP) has said the idea for a “covid tax”, which created some controversy earlier this year, was still on the table.

Such a tax would theoretically be applied to companies that earned excess profits during the coronavirus crisis, although details on how such rates would be calculated have been slim.

Bofferding was speaking Saturday on RTL’s Background am Gespréich radio programme.

She said that debt should not be passed down to future generations. Bofferding indicated that higher company tax rates could be applied for a set period of time after the crisis had passed, to pay off public borrowing.

During the same interview, Bofferding proposed a reform of Luxembourg’s property taxes, saying land should be assessed at current values, “not what it was worth in 1941, that is not fair.”

Covid tax controversy

In March, Dan Kersch, the deputy prime minister and labour minister (LSAP), floated the idea for a “covid tax”, arguing that “some people are coming out of the crisis winners”. The idea met with opposition from coalition partners and business leaders, and was seemingly shelved.

In an interview with Delano earlier this year, Xavier Bettel, the prime minister (DP), said “we shouldn’t stigmatise certain companies” who changed how they operated during the pandemic. Firms which had made a profit during the crisis had already been taxed, he said. Bettel did, however, express interest in increased taxes on unused property.