New State Budget for Norway: Big Tax Cuts for the Richest

According to the proposed budget by Conservative and Progress Party,  Norwegians will pay in avarage 1,600 NOK less tax from next year. But the biggest winners of the tax reduction is the ones who earns more than two million NOK.

People with an income of less than 150,000 NOK get a tax cut of 500 NOK, while those earning over two million get 38.400 NOK tax reduction.

Finance Minister Siv Jensen says that the Budget has a clear stamp from the liberal policies of Conservatives and the Progress Party.

– It reflects the fact that we have a new government in Norway with new priorities, says Jensen to NRK.

More Oil Money 

The proposed state budget for next year, for the first time over 150 billion oil money.

The government will allocate 164 billion oil money, equivalent to 3 percent of the Oil Fund’s value. This is a 0.2 percent (17.3 billion NOK) more than oil spending this year.

The Norwegian mainland economy is expected to grow at around 2 per cent both this year and in 2015. An expected decline in petroleum investment is to weigh on growth next year. The labour market remains strong, with an unemployment rate of around 3½ per cent.

On the other hand, Siv Jensen believes the developments in the Middle East and Syria, the aging population and the reduction in the oil sector are dark clouds that can threaten their plans.

She also notes many businesses that supply the oil sector, had to find new markets to secure the growth estimations. 

– Norwegian economy must be well prepared for lower activity in the oil sector. We therefore provide growth-enhancing tax cuts that will make it profitable to work and invest, says Jensen.

The Government also proposes several changes to the fees and deductions, including:

Trailing limit for registration in the VAT register is increased from 50 000 to 150 000 NOK.

The lower limit for paying National Insurance contributions increased to 49,650 NOK, so that the so-called free card limit increases to 50 000 NOK.

The rates of tax-free mileage allowance using own car on business trips increased to 4.10 NOK per kilometer for travel up to 10,000 kilometers and 3.45 NOK per kilometer for traveling in excess of 10 000 km.

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