In parallel to the 2015 Tax Plan, the State Secretary of Finance has sent a letter to the House of Representatives on possible choices when reviewing the tax system. The government wants to promote employment through a system review.
To gain the widest possible support, the government is looking for support from politicians and society. Preconditions are that a balanced income distribution is not sacrificed for economic growth and that economic growth is not financed with increasing government deficits. To avoid the circulation of money, measures in allowances or in the level of benefits are not ruled out.
Contrary to what might have been expected, this letter does not contain a detailed proposal for a tax review but a number of possible choices as a starting point for discussion. The aims of the review are to simplify the system and increase employment and economic growth. According to the government, the burden on labour and business should be reduced. This could be compensated by an increase in the tax on consumption, for instance by making less use of the reduced rate of sales tax or by increasing that rate. An increase in the capital gains tax is not obvious, according to the cabinet.
The letter lists the following choices:
- Choice 1 - Simplify, especially in surcharges and car taxes.
- Choice 2 - Securing future implementation.
- Choice 3 - Tax incentives entrepreneurs focus on innovation and growth.
- Choice 4 - Tax burden on individuals better spread over the life cycle
- Choice 5 - Reduce rates by cutting deductions.
- Choice 6 - Shift tax burden from labour and business to consumption.
- Choice 7 - Shift tax burden from labour and business to sustainability.
- Choice 8 - Expand municipal tax area.