Sweden’s government will cut income taxes in its 2024 budget, in an effort to increase incentives to work as well as providing some relief to households who are reeling under rising cost of living.
(Bloomberg) — Sweden’s government will cut income taxes in its 2024 budget, in an effort to increase incentives to work as well as providing some relief to households who are reeling under rising cost of living.
The measure, which is primarily aimed at low- and middle income earners, will cost about 11 billion kronor ($1 billion). It follows the fastest food price increases in 70 years and rapid inflation on services that the country’s central bank is struggling to curb. The center-right government has pledged to run a cautious fiscal policy to avoid fueling further price increases, and will finance the tax breaks by nullifying an automatic reduction in the levy paid by high earners.
“This is an incredibly important tool for making it more lucrative to work, increase employment and ease the burden on households that are struggling,” Finance Minister Elisabeth Svantesson said at a news conference in Stockholm on Monday. “Fighting inflation is the most important thing here and now, but at the same time we need to support households and the welfare system.”
Read More: Sweden Gives ‘Bleak’ Outlook for Economy Dogged by Inflation
The government has said it expects to submit a budget that contains additional measures, including support to households and strengthened security, totaling about 40 billion kronor. The budget proposal is slated for Sept. 20.
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