Sweden’s new coalition plans income tax cuts to boost employment Sweden’s new coalition plans income tax cuts to boost employment

Sweden’s new coalition plans income tax cuts to boost employment
29 Jan 2019

Sweden’s new centrist and liberal coalition is expected to cut the number of workers paying income tax as part of a wider economic policy shift to boost employment.

The Spring budget, which is set to be unveiled in mid-April, will include new initiatives valued at Kr4.5 billion (US$500 million), such as lowering payroll taxes on new employees and young people under 18 as well as new spending on the climate and environment.

Next year's budget will also include Kr15 billion (US$1.66 billion) in tax cuts, including Kr6 billion (US$660 million) to reduce payroll taxes and Kr7 billion (US$770 million) to abolish the tax rate on the top 5% of earners.

Martin Adahl, chief economist at the Centre Party, said: “We will try to find a way to decrease the number of people who pay state income tax, and we will also look at the marginal tax rate again. We will also look broadly at tax cuts, so there will be big things happening in terms of lower taxes on jobs and business.”

The aim is to increase environmental taxes to pay for additional tax cuts for workers and business. Major work will begin on changing the Public Employment Service and on easing labour market regulations

Rules on employee stock options will likewise be amended to make them “at least as attractive as the British system, and compatible with the EU”, Adahl said.

The government also plans to evaluate a financial sector tax that it claims will not harm entrepreneurship, according to Bloomberg.

Emma Woollacott

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

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Sweden’s new centrist and liberal coalition is expected to cut the number of workers paying income tax as part of a wider economic policy shift to boost employment.

The Spring budget, which is set to be unveiled in mid-April, will include new initiatives valued at Kr4.5 billion (US$500 million), such as lowering payroll taxes on new employees and young people under 18 as well as new spending on the climate and environment.

Next year's budget will also include Kr15 billion (US$1.66 billion) in tax cuts, including Kr6 billion (US$660 million) to reduce payroll taxes and Kr7 billion (US$770 million) to abolish the tax rate on the top 5% of earners.

Martin Adahl, chief economist at the Centre Party, said: “We will try to find a way to decrease the number of people who pay state income tax, and we will also look at the marginal tax rate again. We will also look broadly at tax cuts, so there will be big things happening in terms of lower taxes on jobs and business.”

The aim is to increase environmental taxes to pay for additional tax cuts for workers and business. Major work will begin on changing the Public Employment Service and on easing labour market regulations

Rules on employee stock options will likewise be amended to make them “at least as attractive as the British system, and compatible with the EU”, Adahl said.

The government also plans to evaluate a financial sector tax that it claims will not harm entrepreneurship, according to Bloomberg.

Emma Woollacott

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

OTHER STORIES THAT MAY INTEREST YOU

Sweden:  Monthly PAYE to replace annual income statements

Swedish government deadlock impacts 2019 regulatory agenda

Sweden tightens up long-term sickness absence rules

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