The new proposals will be part of the government’s coming budget, which it hopes will help improve the finances of Swedish households after years of inflation.
“This will make life easier for Swedish households,” finance minister Elisabeth Svantesson told a press conference on Thursday, while adding that the tax cuts will also help kickstart the economy.
“A lot of this will go towards consumer spending,” she said.
The government measures include higher tax cuts for workers, as well as lower tax for pensioners, at a cost of around 13.5 billion kronor next year.
Anyone earning over 16,000 kronor will benefit from the proposal, while the effects of the change will be less noticeable for people with monthly salaries of 40,000 kronor and above.
“The average worker will see their tax payments cut by around 2,600 kronor a year,” Sweden Democrat finance spokesperson Oscar Sjöstedt said.
According to the government, the cuts are aimed at people with average and below average incomes. However, due to the effect of former changes to income tax being adjusted for inflation, as well as the limit for state tax being raised, those with the highest incomes will actually see the largest cut to their annual tax bill in terms of kronor.
According to tables released by the government, people earning around 60,000 kronor a month and above will see a cut of around 10,000 kronor a year from next year.
Tax cuts for pensioners will also increase, to ensure that they don’t end up paying more in tax than people in work. This means that the average pensioner will see a 1,400 kronor cut to their tax bill from next year, if the proposed budget is accepted in its current form.
The third proposal in the new budget is the implementation of a tax-free limit on ISK accounts, which can be used to invest in funds or shares. From next year, the first 150,000 kronor on these accounts will be tax free, rising to 300,000 kronor in 2026.
For the average person with savings in an ISK account, this means 750 kronor less tax next year.
This is expected to cost the state 4.4 billion kronor in 2025, rising to 7 billion kronor in 2026.
The budget proposal, negotiated by the government and the Sweden Democrats, will be presented in its entirety on September 19th.
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