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.

“Reform creates jobs”

Löfven announces new strategy
Löfven announces new strategy

Sweden’s centre-left government yesterday unveiled its strategy to tackle the nation’s housing crisis, pledging the construction of up to 15,000 properties to rent annually.

Prime Minister Stefan Löfven has promised that the government will invest SKr 3.2 billion a year in the project, as of 2016. The reform will be financed through the lowering of the tax relief on home repair and maintenance – ROT – from 50 per cent to 30 per cent.

Prior to the general election last year Stefan Löfven promised he would leave ROT well alone. On Wednesday, the PM said that soaring ROT costs lay behind the U-turn. He also argued that the reform would create jobs.

“This means we will be able to build more new apartments and shift the emphasis from repairs to new construction. We have a housing shortage in 150 of Sweden’s 290 municipalities,” he said.

Ulf Kristersson, the Moderate Party’s spokesman on economic policy, is highly critical of the plans, saying it was a poor idea to re-introduce subsidies on the Swedish housing market and that it could pave the way for a black market.

Emil Källström, the Centre Party’s spokesman, has warned that the reform would in fact cause construction costs to soar. “We know that building subsidies end up in the pockets of the construction firms in the form of bigger profits,” he said.