The government plans to raise the earned income tax credit or jobbskatteavdrag, lower tax for salaried workers and pensioners, halve VAT on food, lower electricity tax nationwide, lower tax on sick pay and cut the fees for childcare and after-school activities.
It's even pledged to cut tax on tickets to see live dance bands.
Taken together, all of these tax cuts will use up about 30 billion kronor of the 80 billion kronor in additional spending the government has flagged for its 2026 budget.
So how will it affect people living in Sweden?
Earned income tax credit (jobbskatteavdrag)
In a press conference prior to the full budget reveal, the government boasted that the increase in the earned income tax credit (jobbskatteavdrag) would save a typical family where one partner is a nurse and the other a police officer 802 kronor a month.
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These would be relatively highly paid nurses and police officers, as you need to earn 41,667 kronor to save the 401 kronor a month required to make this saving. A family where each partner was earning 25,000 kronor would only save 152 kronor each, or a total of 304 kronor a month.
This is the most expensive of the government's giveaways, costing 17 billion kronor.
Increase in basic deduction for pensions
The increase in the basic deduction for pensions will mean someone with a pension income of 25,000 would receive an increased basic deduction of 148 kronor per month, and someone with a pension of 62,500 or more will receive a deduction of 424 kronor per month.
The Swedish Association for Senior Citizens gave this proposal a lukewarm welcome.
"Seventy percent of pensioners do not have 25,000 kronor a month pension, but less than that," the organisation's chair, Maria Larsson, said in a press release. "A reduction is of course welcome, but for those with with lower pensions it is little more than crumbs."
Cut in preschool and after-school fees
The government claims that this cut in fees for nursery schools, or förskola, and for after-school activities in schools will save the hypothetical police officer and nurse's family 375 kronor.
The government is changing the salary at which parents have to pay the "maximum fee" or maxtaxa, which currently means that the full fee is only paid by families with a combined income of 59,440 kronor or more.
Increasing the salary at which families pay the maximum fee will save money for families earning 59,440 kronor a month or more, but will not save money for lower income families.
Electricity tax
The cut to electricity tax will reduce tax paid by about 20 percent, saving 1,000 kronor a year for a house which is not heated by electricity. In the government's calculations, the nurse and the police officer's family, who apparently have a house warmed by district heating, save 85 kronor a month.
People in a bigger detached house heated by electricity, however, stand to save even more. According to calculations carried out for the broadcaster TV4, an average detached house heated by electricity uses 20,000 kilowatt-hours, meaning they would stand to save 2,000 kronor a year.
Halved VAT on food
At a press conference announcing the decision to cut VAT on food from 12 percent to 6 percent, Sweden's deputy prime minister, Ebba Busch, said it would cut the annual cost of feeding the average two-child family by 6,500 kronor, and of feeding a typical retired couple by about 4,400 kronor.
Swedbank calculated that the reduction was likely to lower the monthly costs for the average two-child family by 600 kronor a month, by 400 kronor a month for a single parent, and 200 kronor a month for someone living alone.
Lower tax on sick pay
This will of course only affect people receiving sick pay or so-called 'activity grants' for people between the ages of 19 and 29 who cannot work due to sickness or disability.
People receiving these types of income pay significantly more tax than those who earn a salary and even than those receiving a pension, largely because sick pay and activity grants are not eligible for any tax reduction.
In the press release, the government said that there would now be "the same tax level as for work income", and that the "tax gap" with earned income would be removed.
It's unclear if this means that sick pay would also be eligible for an earned income tax credit, or if this will work in some other way. The government estimated in its presentation that this would cut the tax of those affected by 1,800 kronor a year. The measure will cost the government 460 million kronor in 2026.
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