Business escapes harsh new taxes

The budget agreement between the Labour Party government and a coalition of centrist parties is not as harsh on businesses as the government had originally intended.

The proposed "business-cycle" tax was shelved, the investment tax was abolished, the carbon dioxide emissions tax regime was relaxed and taxes on industrial electricity consumption were not raised as feared. A new tax on stock dividends, originally proposed at 14 percent, was reduced to 11 percent. State revenue will be enhanced by hiking the national value-added tax from 23 percent to 24 percent and expanding the tax's range to include legal services, fitness centre memberships and several other sectors that had been exempt. Food shoppers will eventually get a break. On July 1, the value-added tax on food will be cut from 24 percent to 12 percent. The hope is that lower food prices will stem the tide of shoppers who drive to Sweden to buy meat and other products.