Government raises taxes

Finance Minister Magdalena Andersson and Financial Markets Minister Per Bolund called a press conference on Friday to say that the government intended to raise employer contributions for the under 25s. The government also proposed a hike of 0.44 kronor per litre on petrol tax and of 0.48 kronor on diesel, as well as an increase on the tax on nuclear power generation and on certain types of savings. A cut in the deduction on household services, RUT, and in the deduction on home renovations, ROT, will also be made.

As of 1 August, the government will start raising employer contributions for the under 25s – from 15% to 25%, which will generate an additional SKr 5.6 billion in revenue for the Treasury.

However, the main changes, which will bring an extra SKr 22 billion into the state coffers, will come into effect on 1 January 2016.

Magdalena Andersson is still keen to introduce a bank transaction tax but this is unlikely to come into effect before 2017, at the earliest.

Anna Kinberg Batra, the leader of the main opposition party, the Moderates, said on hearing the government’s plans: “Heavy tax hikes on households, transport and companies – how does that make Sweden stronger or create more jobs?”

Meanwhile, Erik Ullenhag, the Liberal Party spokesman on economic policy, accused the centre-left government of breaking one election promise after the other, thereby damaging its credibility on economic policy.