The Swedish government is expected to announce a significant reduction in food VAT, cutting it from 12% to 6% starting April 2026. This move, supported by several political parties, aims to alleviate financial pressure on households but faces criticism for potentially benefiting companies more than consumers.
Center Party Holds Press Conference on Food VAT Reduction
Center Party Holds Press Conference on Food VAT Reduction
Lower food VAT. The government may announce this on Thursday. However, at 10 AM, the Center Party has already called a press conference on the same topic.
At 10 AM on Thursday, the Center Party will hold a press conference regarding food VAT and Swedish food production.
According to information from SVT News, the government is expected to propose halving the food VAT soon. The reduction from twelve to six percent is set to apply from April 1, 2026, to December 31, 2027, according to the channel. Over these two years, the cost to the state is expected to total 37 billion SEK.
At 11:15 AM, the government has called a press conference with a budget announcement.
SD's Proposal
The Sweden Democrats (SD) have pushed for a reduction in food VAT, and Expressen has previously reported that the party has managed to get its proposal through. Food VAT is important for SD as it benefits everyone, according to the party. The Social Democrats also support the reduction, reports DN.
Finance Minister Elisabeth Svantesson (M) has presented an expansive budget, which, in addition to food VAT, plans to introduce reduced income tax.
Criticism: Not Targeted
Swedish parliamentary parties have shifted their stance on food VAT, with more now in favor of reducing it. However, several economists argue that a reduction does not fully reflect in store prices but rather goes to company profits.
Nils Åkesson of Dagens Industri writes in an analysis that the issue has been thoroughly investigated with the same conclusion: it is poor fiscal policy.
"Lowering food VAT to support financially pressured households? It's really expensive election pork, with low nutritional value," he writes.