Sweden government: Announces tax cuts totaling around 30B SEK in 2026 budget

Sweden government: Announces tax cuts totaling around 30B SEK in 2026 budget

The Swedish government has announced a series of tax cuts totaling around 30 billion SEK in its 2026 budget, aimed at supporting households and the wider economy. The measures, which include a temporary halving of the value-added tax (VAT) on food and a reduction in electricity tax, are part of the government's election-year budget bill.

Prime Minister Ulf Kristersson announced the VAT cut on food, which will be reduced from 12% to 6% from April 2026 to December 2027. Deputy Prime Minister Ebba Busch noted that the average family would save 6,500 SEK a year, while a pensioner couple would save around 4,400 SEK [1]. The government has also established a food commission to monitor price developments and ensure the savings are passed onto consumers.

The government plans to cut the electricity tax by 20% from January 2026, which will lower income for the state by around 6 billion SEK [2]. The right-wing coalition government, which relies on the Sweden Democrats for parliamentary support, has said the budget will aim to support households and the wider economy.

The 2026 budget bill, which is expected to be submitted to parliament on September 22, also includes 80 billion SEK of unfinanced measures to boost the economy. The government expects 0.9% GDP growth this year and 3.0% in 2026. Analysts have said it is likely to contain income and corporate tax cuts as well as unfinanced spending [3].

The VAT cut on food and the electricity tax reduction are part of the government's efforts to address the economic challenges facing Sweden. Despite a series of interest rate cuts, growth has stalled this year due to uncertainty over the impacts of U.S. President Donald Trump's erratic tariffs [1]. The economy is still feeling the after effects of a period of high inflation that followed the COVID-19 pandemic.

References:
[1] https://www.reuters.com/markets/europe/sweden-temporarily-halve-food-vat-election-year-budget-2025-09-04/
[2] https://www.tradingview.com/news/reuters.com,2025:newsml_L5N3UV04L:0-swedish-government-to-cut-electricity-tax-in-election-year-2026/
[3] https://www.reuters.com/markets/europe/swedish-government-halve-vat-food-2025-09-04/