POLITICS & INSTITUTIONS - POLITICS

Solidaritéitspak 2.0

Parliament approves VAT reductions, gas rebates



A majority of MPs voted in favour of the first tripartite measures to be implemented. Photo: Chambre des députés

A majority of MPs voted in favour of the first tripartite measures to be implemented. Photo: Chambre des députés

Luxembourg’s deputies on 20 October gave their support to a draft law applying some of the measures presented during the tripartite agreement in September 2022. 

Price tags in the grand duchy from 1 January 2023 to 31 December 2023 will notice their VAT reduced by one percentage point, for instance, as the tax reduction measure is applied to normal, intermediate and reduced VAT rates. As such, normal VAT will decrease from 17% to 16%, intermediate from 14% to 13% and reduced VAT will be at 7% for the year. 

The much-discussed rebate on heating fuel--15 cents per litre--will also see its deadline extended, running from 31 October 2022 to 2023. Liquified petrol gas will cost 20 cents less per kilogram than the actual market price. 

“I am delighted that this text was adopted unanimously by the Chamber of Deputies in record time. It will considerably curb inflation and support households and businesses in the Grand Duchy,” finance minister Yuriko BackesYuriko Backes (DP) commented on the matter.