2024-06-16-IMF-卢森堡_精选问题（英）_17页_1mb

LUXEMBOURG FISCAL TRENDS AND RISKS

A. Introduction

• Luxembourg maintains a track record of prudent fiscal policy but faces challenges due to declining revenue growth and increasing expenditures.
• Fiscal performance weakened in recent years, with a shift in the balance from surplus to deficit, particularly affecting the central government.
• Maintaining fiscal space is essential for supporting the AAA rating and funding future obligations (ageing, climate/digital transition, defense).

B. Drivers of Revenues and Expenditures

• Revenues: Sources:
  • Personal Income Tax (PIT): Strongest performer (increased significantly due to employment/wage growth and less frequent bracket adjustments).
  • Corporate Income Tax (CIT): Declining share, less volatile, concentration on the financial sector, effective rates lower than nominal.
  • Other Taxes: Situation varies (e.g., decreased VAT revenues, higher property taxes but concentration risk).
    Luxembourg's overall tax-to-GDP ratio increased since 2010 but remains below some EU peers.
• Expenditures: Sources:
  • Social Benefits: Largest component, driven by growing population needs like pensions, healthcare, and family benefits.
  • Compensation of Employees: Significant increase due to public sector expansion.
• Public spending is high but remains below the OECD average.

C. Recent Fiscal Developments, Outlook, and Risks

• Post-pandemic, normalized fiscal policy was delayed due to energy crisis measures, leading to strong spending growth.
• Outlook: Expenditures projected to rise significantly (to ~50% GDP) due to social benefits, investment, and defense; Revenues projected to increase but may be constrained by tax reforms aimed at boosting competitiveness.
• Risks: Downwardly skewed due to spending pressures (ageing, green digital goals, defense) and revenue uncertainty (especially around corporate tax).

D. Options to Safeguard Fiscal Space

• Revenues: Implement more frequent, budget-neutral tax bracket adjustments; Strengthen tax collection (retrospective changes avoidable). Consider pension reform for long-term sustainability.
• Expenditures: Reduce unnecessary public spending; Improve efficiency in social programs (targeting, design). Increase spending discipline.
• Fiscal Framework: Establish a national fiscal framework and strengthened fiscal council for credibility and guidance.

Fiscal sustainability requires careful balancing, with a focus on efficiency, prudent reforms, and formalizing fiscal commitments.