In its alternative budget, the Center Party (SP) proposes tax cuts totaling NOK 9 billion, out of which NOK 2.8 billion would go on cutting food VAT.
SP’s alternative budget was presented to the Norwegian parliament (Storting) on Thursday morning.
The party pointed out that cross-border trade has increased sharply in recent years but that closed borders during the corona pandemic have provided more jobs and increased value creation in Norway.
“We believe that action must now be taken to ensure that this value creation remains in Norway even after the borders reopen,” SP wrote in its budget proposal.
The party now calls for VAT to be reduced on all foods – not just sugar, chocolate, and non-alcoholic beverages.
“The Center Party proposes to reduce food VAT to the Swedish level (from 15 to 12%. That is a tax relief of NOK 2.8 billion in 2021, which will amount to NOK 4.8 billion in 2022.”
In other respects, SP’s proposal means that the state would collect NOK 2.75 billion less in taxes and fees than what the government proposes in its proposal.
The Center Party also wants a crisis package totaling NOK 32.4 billion.
The governing parties recently agreed with the Progress Party (FRP) on a NOK 22.1 billion package for corona-affected companies and municipalities.
Corona support schemes
SP wants to use NOK 16.7 billion to extend and strengthen corona support schemes, such as the compensation scheme for companies, a new compensation scheme for aviation, and income security for workers and the self-employed.
NOK 6.1 billion of the total tax relief of NOK 9 billion would be included in the crisis package.
That includes maintaining the low VAT rate of 6% for tourism, transport, and culture throughout 2021, not just the first half of the year as the government proposes.
NOK 9.6 billion would go to targeted measures for increased activity and restructuring.
© NTB Scanpix / #Norway Today