The Swedish government's decision to halve the food VAT has sparked criticism from the Liberal Youth of Sweden and economists, who argue it's an ineffective and costly measure. Experts suggest that raising benefits would be a more efficient way to support low-income earners. The proposal has also been criticized for potentially increasing administrative burdens.
Criticism Mounts Over Halved Food VAT in Sweden
Criticism Mounts Over Halved Food VAT in Sweden
The Tidö parties have decided to halve the food VAT, a move that has faced sharp criticism from the Liberal Youth of Sweden (Luf) and a united body of researchers.
– It's a terrible idea. You won't find any tax economist who thinks this is good, says tax expert Åsa Hansson to TT.
The government's new initiative to lower food prices is under fire. Researchers largely agree that reducing the food VAT is expensive and not particularly effective, writes TT.
– It's a terrible idea. You won't find any tax economist who thinks this is good. It's a very blunt instrument if we want to help those who struggle to pay for food, says Åsa Hansson, associate professor of economics and tax expert at Lund University, in a comment to TT.
Raising benefits is cheaper if you want to support low-income earners. This is the view of Peter Johansson from the Swedish National Audit Office, who led the agency's review of the VAT reduction in the 1990s.
– Then you get the same distribution effect at about half the cost, he tells TT.
Luf Criticizes Food VAT: “Bad”
The Liberal Youth of Sweden (Luf) also criticizes the reduction.
– We think it's bad to tamper with the VAT system, says chairman Anton Holmlund.
He is also critical of the introduction of a food price commission, which is supposed to ensure that food giants actually lower prices and do not keep the profit for themselves.
– It will lead to a lot of unnecessary administration and regulations. I also think it will be difficult to control, he says.
Instead, Anton Holmlund believes the government should have chosen to lower taxes.
Your own party, the Liberals, is part of this agreement, what do you think about that?
– I had hoped that the Liberals could have resisted this populist proposal. It's obvious that it's the Sweden Democrats who are once again pushing through ill-considered policies, says Anton Holmlund.
Saco: Tax Reform Needed
The trade union Saco believes that the reduction needs to be complemented with a “comprehensive tax reform.”
– Such a reform should instead be characterized by greater uniformity. Such a reform is something that both the government and the opposition, and not least the Swedish people, would benefit from. Constantly changing tax rates without a long-term idea of how welfare should best be funded is not particularly responsible behavior, says Thomas Andrén, Saco's welfare economist in a comment.