Now at 10 o’clock the committee presents its report. Economics professor Ragnar Torvik from NTNU has led the work. One of the proposals is a 25 per cent value added tax (VAT) on everything, including food, cultural experiences and public transport. Today, VAT varies between different goods and services, among other things the mentioned areas have lower VAT. The committee recommends that around half of the increased income from value added tax be set aside for direct compensatory measures, including increased child benefit, housing allowance and student aid. The committee also proposes to discontinue the tax-free scheme. Moving on 40 billion. The committee also proposes measures to strengthen the line of work, including by cutting the social security tax by 1 percentage point. All taxpayers pay this tax regardless of income with NOK 17 billion. At the same time, an “employment deduction” of a total of NOK 23 billion will be given on the tax for low and medium incomes, which will make it more profitable to work. – With our proposals, it will be more profitable to work from a tax point of view. It will also stimulate investment in private business. In this way, the tax system will contribute to increased value creation in the entire economy, says Torvik. To raise money, Torvik highlights five main points: Higher taxes on behavior harmful to the environment and health (plastics, textiles, CO₂) Increased use of basic rent in the tax system. Higher tax on consumption. Higher tax on higher pensions. Higher tax on real estate. Overall, the committee’s proposal is so-called revenue neutral: NOK 40 billion is spent on relief, while the same amount is collected in new taxes and fees. – We give most of that tax relief to low-paid workers, says Torvik. PROPOSAL: Ragnar Torvik’s tax committee wants a national housing tax. Photo: Ørn E. Borgen / NTB National housing tax Torvik’s committee also proposes a housing tax for everyone. More specifically, the committee will have 22 per cent tax on 1 per cent of the home’s real value. – The committee recommends that a tax be introduced on the benefit of using one’s own home which is phased in over some time, so that time is given for adaptation, the committee says. – We have unlocked a lot of our investments in housing, because it is tax-efficient. Those with the highest incomes also have the largest homes and earn the most from this, says Torvik. Today, it is up to each individual municipality to decide whether to introduce property tax. However, there is a maximum limit to how much property tax a municipality can collect. If you live in a municipality with municipal property tax, this must be deducted from the state property tax, the committee suggests. The committee also proposes to remove the document fee. – It is a harmful tax on housing, because it is a tax on the transaction, says Torvik. The committee is also a supporter of a ground rent tax on power and aquaculture, which has been hotly debated this autumn. At the same time, an investigation into ground rent on trawl fishing is proposed. Finance Minister Trygve Slagsvold Vedum (Sp) showed with a smile that he had tried out certain parts of the report this autumn. – The parts I have tried have created debate, said Vedum. The Minister of Finance believes he received “exciting and demanding proposals”. The report will now be available for consultation until April. BREED: The Tax Committee has gone through the entire Norwegian tax system. Photo: Gorm Kallestad / NTB The committee also wants a new inheritance tax. – We propose to reduce wealth tax and introduce an inheritance tax, says Torvik, who also wants a cut in wealth tax. – There is a consensus in the committee that wealth tax has harmful effects, and it has greater harmful effects than inheritance tax. The reduction in wealth tax is greater than the increase in inheritance tax, says Torvik. The inheritance tax was abolished by Erna Solberg (H) after the change of government in 2013. The current government has not advocated reintroducing it. Changes for pensioners The Committee also believes that the tax on medium and high pensions should be increased. This is done to cover increased pension expenses in the future. – We have some proposals that affect both incentives and taxation of pensions. We make it much more profitable to work alongside a pension, says Torvik. – Today there is a minimum deduction for pensioners. We take that away and transfer the money to the pension tax deduction. The advantage of that is that if you are retired, it will be more profitable to work alongside your pension, compared to how it is today. The committee was set up by former Prime Minister Erna Solberg last summer. The assignment was to carry out a full review of the tax system, with particular emphasis on strengthening productivity and competitiveness in the business world. After the country got a new government last autumn, the committee received an additional mandate from Finance Minister Trygve Slagsvold Vedum (Sp). Among other things, it was about looking at which taxes can be increased, and how the tax system can contribute to redistribution. It is highly unclear which of the committee’s proposals it may be politically relevant to introduce. The report will now be considered by the government.
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Committee wants 25 percent VAT on everything – including food, culture and collective – news Norway – Overview of news from different parts of the country
