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Government proposes major tax cut plan

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Government proposes major tax cut plan
08:28 CEST+02:00
The government is set to propose 15 billion kronor ($2.2 billion) in tax cuts designed to benefit working Swedes.

The package will be one of the main points in Prime Minister Fredrik Reinfeldt's speech at the opening session of the Riksdag on Tuesday.

The measure is a sign that the Moderate Party appears to have triumphed in its negotiations with the other parties which make up the centre-right Alliance government.

Included in the figure is what the government is calling the third step in its employment tax rebate, directed primarily at low- and middle-income earners.

The measure will provide an average of 225 kronor more every month after taxes, and up to 250 kronor.

At the same time, the government wants to raise the upper limit for incomes subject to the national income tax from a monthly salary of 28,400 kronor to 31,700 kronor next year.

The change will reduce the number of people required to pay the additional tax, and in so doing reduce their marginal tax rate from 51 to 31 percent, according to the government.

In addition, 16 billion kronor will be used to lower social fees paid by employers for the workers they hire, reduce corporate taxes, and changes to rules to improve conditions for small businesses.

The government's plans were presented by the four Alliance party leaders, Reinfeldt, Maud Olofsson, Jan Björklund and Göran Hägglund, in an article published in Tuesday's Dagens Nyheter (DN) newspaper.

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