Government mulls tax deductions for IT help

Government mulls tax deductions for IT help
Sweden's finance ministry is looking into extending a much-debated tax deduction scheme for services to include reduced employers' fees for IT services.

The Dagens Industri (DI) business daily reported on Friday that the ministry is looking into adding not only IT services to the tax deduction scheme, but also potentially several other new areas.

DI reports that the government may present the new services in its autumn budget.

The existing tax deduction system applies to help at home such as cleaning and babysitting, but also covers the employment of plumbers, electricians, and other tradesmen for home improvement projects.

The government said it partly introduced the system to stimulate an existing but often cash-in-hand sector of the Swedish economy, while critics have said the state is left picking up the tab for the convenience of the middle class.

The system is considered contentious in Sweden, although the opposition Social Democrats have signaled they would not scrap the tax breaks it if they come to power in 2014.

The government previously extended the tax-deduction to cover tutors, allowing parents to pay a reduced fee when they employ private tutors for their children.

The teachers unions were critical to the move, warning it could help create a two-tier education system.

TT/The Local/at

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