A petition demanding lower taxation for singles in March 2019 reached more than 5,000 signatures and was debated in parliament. But a tax reform promised by the government aimed at treating singles in the same way as married couples or people in civil unions has been shelved until after the 2023 elections. The government cited the pandemic as a reason for the delay.
A new effort is now underway to get the government to overhaul it tax policies. “The tax rate for a single person is very high compared to a married couple or another bracket,” the petition author, Jacky Bordin, states in the document. “Being single, we have to take on all the costs alone (housing, fees, etc…). This represents much more in terms of percentage than for a couple which can share the burden.”
The petition on is open for signature until 30 December. But it’s not the only document calling for change as a second petition demands an end to tax discrimination for single parents.
Single parents are taxed in the 1a bracket while couples--with or without children--are taxed in the category 2 bracket. A single parents’ lobby group in August said that a couple without children earning €63,932 are taxed 8.16% on average. This rises to 19.75% for a single parent and a single parent tax credit and family allowance cannot make up for the different.
The same group--the Collectif Monoparental--is now demanding that single parents should automatically be placed in tax bracket 2 and for the single parent tax credit to increase to €2,500 regardless of income or alimony received.
“Children from single-parent families are still discriminated here in Luxembourg because of a tax system that is based on the marital status of their parents. These children are unfairly disadvantaged,” the group says in the petition. “Our single parent families are in a situation that they can no longer manage: 58.7% of them cannot make ends meet while 38% risk falling into poverty.”
These statistics are based on a by national statistics office Statec on the impact of the covid-19 pandemic on income inequality published in October.
This , too, is open for signature until 30 December. If it gathers more than 4,500 signatures, it must be debated by lawmakers and government representatives. Anyone aged 15 or over with a Luxembourg social security number can sign a public petition.
The OECD in a 2021 report said the average single working in Luxembourg faced a net average tax rate of 28.9% in 2020, above the 24.8% OECD average. The take-home pay after tax and benefits was 71.1% of their gross wage, below the OECD average of 75.2%.
On the other hand, the average tax rate for an average married worker with two children was just 4.7%, the 31st lowest in the OECD and well below the 12.9% average. This means that take-home pay after tax and family benefits was 95.3% of their gross wage, more than the 87.1% OECD average and significantly more than that for singles.