According to a report from Sweden's public broadcaster SVT, Finance Minister Elisabeth Svantesson will propose slashing VAT (moms in Swedish) on food from 12 percent to 6 percent, with the change coming into force on April 1st next year and applying for the rest of 2026 and 2027.
Both Svantesson herself and Sweden Democrat leader Jimmie Åkesson proposed cutting VAT on food when the four so-called Tidö parties supporting the government met to discuss budget possibilities last month.
The tax cut will cost 16 billion kronor in 2026 and 21 billion kronor in 2027 in foregone revenue and is intended to increase the buying power of Swedish households, boosting consumption and stimulating economic growth.
The government will instruct the Swedish Competition Authority to check that the tax cut is fully reflected in prices at the till and to ensure that food retailers and wholesalers do not use the tax cut to expand their margins.
News of the government's plan was published shortly after the finance spokesperson for the opposition Social Democrats, Mikael Damberg, told the Dagens Nyheter newspaper on Monday that his party planned to propose halving VAT on food in its own shadow budget proposal.
The party had previously been sceptical about cutting VAT on food, a policy long proposed by the far-right Sweden Democrats. The Social Democrats also plan to propose increasing child benefits by 200 kronor a month.
"We need to get consumption going," Damberg said, explaining the U-turn. "Households still feel battered by inflation and high interest rates. People need to feel a bit more secure about their household finances. Food prices are a really important part of that."
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