Photo: Michael Brannäs/Scanpix.
Autumn budget

Conservative Moderates to halve restaurant VAT

Updated 4.20pm

The ruling conservative Moderate Party has said that it will continue with its proposed halving of value added tax (VAT) for the restaurant industry in the autumn budget, according to Swedish Radio News.

Despite the recent announcement that there will now be less money available for other tax reductions, due to the global financial instability and revised growth forecasts, the conservative Moderates seem determined to stick by this particular reform. Reinfeldt sees halving restaurant VAT as part of the party’s focus on helping young people in employment.

“This is a sector with a clear link to young people and it is therefore important to us,” said Prime Minister Fredrik Reinfeldt during a press conference ahead of his annual summer speech on Saturday.

Reinfeldt did not want to speculate on how many new jobs the tax cut would create, or how much money is now available for such reforms given revised growth forecasts, but emphasised that, given the uncertain economic climate, the reform would at the very least ensure that jobs in the restaurant industry would not be lost.

Earlier estimations have put the number of jobs that would be created at 3,500 at a cost of $US 855 million.

The party also wants to make more resources available to teachers and teacher training, as well as for vocational education. Reinfeldt admitted, however, that due to economic constraints any other reforms for the 2012 budget, apart from restaurant VAT, would now be “very limited.”

At the press conference, Reinfeldt also proposed a measure whereby young unemployed people on social benefits would be able to retain some of their benefits when they started to work, reports news agency TT.

Next Friday, Finance minister Anders Borg shall present new prognoses for, amongst other things, how much money will be available for reforms. The 2012 budget will be presented to parliament on 20th September.

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