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6,000 jobs created in restaurant sector after V.A.T. reform: estimate

Published onsdag 2 december 2015 kl 20.31
File photo: Michel Euler / AP / TT
File photo: Michel Euler / AP / TT

A tax reform made by the previous center-right government in order to create more jobs within the restaurant industry has worked to some extent, according to the results of a new inquiry by the National Institute of Economic Research (Konjunkturinstitutet).

In 2012, the Alliance government, led by the conservative Moderates, lowered the V.A.T. that restaurants have to pay from 25 percent to 12 percent, and since then about 6,000 more people have been employed within that industry than would have happened otherwise, according to Iida Häkkinen Skans, the economist who led the study. However, only about 1,000-3,000 of those jobs are permanent, whereas the then-government had hoped that all 6,000 would be permanent, reports Swedish Radio News.

However, Niklas Wykman, the Moderates' spokesperson on tax policy, maintains that the point is that 6,000 new jobs were created.

"A large proportion of those who are unemployed have little or no experience in work, or low levels of education. So, one can't afford to say no to jobs," he told Swedish Radio News.

The cost of lowering the tax, according to the state budget for 2012, would be SEK 5.4 billion in the first year and then sink. The institute also found that prices at restaurants went down by 5 percent, after the reform was made.

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