Compulsory contributions since the 1960s in Luxembourg

The rate of compulsory contributions is higher nowadays than in the 1960s in all OECD countries, except the United States. In Luxembourg, compulsory contributions - taxes, social contributions of employees and employers - represented some 28% of GDP in the mid 1960s. Today, the rate reaches 37% in the Grand Duchy, against 34% on average in the OECD. However, this increase in the tax burden is concentrated within the period from the early 1970s to the mid 1980s. Since the rate of compulsory contributions has remained relatively stable. Regarding the structure of compulsory contributions, excise duties, VAT and registration tax have evolved with great dynamism in Luxembourg. The revenue from these taxes now account for over 30% of the total, against 20% at the beginning of the period. Labour taxation could be reduced in the Grand Duchy and is now among the lowest in Europe.