New State Budget of Norway: Higher Interest Rates, Lower Tax for Rich and More Expensive Electricity and Diesel

Ex-students and diesel car drivers are among the losers in the budget, while current students and those with higher income is among the winners of the proposed 2017 state budget, writes NRK.

These are the major changes in the taxation system that will affect most people. The tax rate for companies and individuals was lowered from 25 to 24 percent. It will be reduced to 23 percent in 2018 based on the tax settlement in Parliament.

The government also offers a little relief in wealth tax. The personal allowance of taxation of wealth is raised moderately from 1.4 to 1.48 million NOK.

Also moderate tax cuts have been introduced for almost all wage groups, including those with low incomes. However, those who earn over a million NOK will get the biggest tax cuts from the government next year. They get an average tax cuts of 2400 NOK, while other who earn below 350,000 NOK receive up to 600 NOK in tax relief.

Part of the reason is that those who earn much also receive easing of wealth tax, while those who earn little do not have so much wealth, notes NRK. 

New Measures in Housing Market and Student Loans

The government also introduces a measure that evidently intended to limit the extensive speculation in the housing market. The tax deduction for the debt on second house is cut to 20 percent from 25.

The government increases interest rate on educational loans by 0.35 percentage points and will also discontinue travel scholarship to travel in Norway and Scandinavia.

Higher electricity, tobacco and alcohol tax and more expensive diesel

While wealth tax decreases, the government proposes to increase the electricity tax from 16 øre to 16.32 øre in the state budget for 2017. It has risen steadily in recent years since the Conservatives and the Progress Party took over power in 2013.

Moreover, alcohol – and tobacco taxes will increase by between 2.0 and 2.1 percent.

Another loser of the 2017 proposed budget is the diesel car drivers. Diesel will be 15 øre more expensive per liter and diesel tax is increased by 35 øre per liter.

The controversial air passenger tax will be also increased from 80 NOK to 82 NOK.

 

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