Sweden Cutting Income Tax

September 25, 2009 Taxation in Sweeden  No comments

The Swedish government has announced their plans to reduce the country’s income tax levels.

In an effort to bolster the ailing employment market, the Swedish Government has announced another round of income tax cuts. The tax cut will see a cut of SEK250 from the average worker’s monthly tax duty. It is intended that the lowered income tax levels will encourage Swedish citizens to return to the work force. Prior to the tax cuts, governmental estimates had placed unemployment in Sweden at 8.8% in 2009, reaching 11.4% in 2010.

The cut was announced by Fredrik Reinfeldt, Swedish Prime Minister, on 19th of September. It is scheduled to be presented to parliament on the 28th of September. If accepted, the income tax cuts will come into effect on the 1st January 2010. The decision is budgeted to cost the government approximately SEK10 billion.

In regards to tax cuts, in a released statement the Swedish government said, “The coalition government has agreed on reforms for jobs and entrepreneurialism that will increase employment in the long-term. It has to be more profitable to work and more companies should be able to hire employees”. Anders Borg, Sweden’s Minister for Finance, made statements at the announcement saying that the tax cutting measures are aimed at reversing the damage done to Sweden’s economy by the world financial crisis.

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