Norwegian government announces tax cuts aimed at easing financial burden on workers

The Norwegian government is set to implement tax cuts aimed at easing the financial burden on ordinary workers while those with higher incomes are expected to contribute a bit more. Finance Minister Trygve Slagsvold Vedum emphasized this approach as he addressed the annual budget conference at the Prime Minister’s office. However, he refrained from specifying the extent of the cuts or the individuals who would receive the most significant tax reliefs.

Vedum stated that the government has already reduced income tax by 8.9 billion Norwegian kroner since taking office, with a focus on benefiting those with low to middle incomes, defined as earning less than 750,000 kroner annually. Nonetheless, Kari Elisabeth Kaski from the Socialist Left Party expressed concerns that the proposed tax cuts may not be substantial enough to improve the financial situation for most citizens. She argued that for the cuts to be meaningful, they must be significant enough for people to notice an increase in their disposable income in conjunction with strengthened welfare services.

Hans Andreas Limi from the Progress Party acknowledged that while the 8.9 billion kroner tax cut sounds significant, historical context suggests that the impact on individual taxpayers has been minimal. He pointed out that in the best year, average taxpayers saw a mere 150 kroner reduction in monthly taxes—an amount insufficient to offset rising living costs and interest rates.

In terms of business taxation, Vedum clarified that there would not be any major changes. However, the controversial increase in employer contributions for those earning over 850,000 kroner will be removed starting January 1 next year, a measure intended to be temporary due to extraordinary costs arising from the conflict in Ukraine. Further details on how these changes will affect the budget are expected to be announced later.