Everyone in Sweden will be entitled to tax relief of up to 50,000 kronor a year when hiring people to carry out domestic services, including cleaning, laundry, cooking and babysitting.
The government hopes that the new rules will provide extra jobs and relieve pressure on working parents.
“We had a big discussion on how we could help ordinary people manage the puzzle of daily life,” said industry minister and Centre Party leader Maud Olofsson, who announced the measure with finance minister Anders Borg.
“This reform is also important for the Swedish labour market,” Olofsson added.
“In Finland the number of employees in this sector is going up all the time, and 42 percent of those working in it today were previously unemployed,” she said.
People will be able to make the reduction at source, meaning that they won’t have to wait for their final tax declaration to benefit from the tax relief.
The proposals were put forward in the governing Alliance’s election manifesto, although the detailed plans announced today contain new features. The government now intends to extend the tax breaks to cover costs associated with paying someone to take children to and from extra-curricular activities.
Only services carried out in or near the home will qualify for tax breaks. This means that clothes cleaned at home will be covered, but not dry cleaning. Paying a babysitter to take children to sports games will be covered, but taxis will not.
Anders Borg admitted that there would be problems in drawing a line between those activities that would get tax relief and those that would not.
“That is unavoidable,” he said.