Reporting of tax expenditures 2023
Translated from Swedish by AI; the translation may contain errors. The Swedish text is the original.
Summary AI, written in advance
The debate concerned the government's reporting of tax expenditures for 2023. M argues that the tax system needs to be transparent, simple, and understandable to maintain legitimacy 1. Tax expenditures arise when the tax take for certain groups is lower than a comparison norm 1. M emphasizes that tax expenditures can make visible support to companies and households on the revenue side of the budget as well as highlight the lack of uniformity in the system 1. M considers tax exemption for charging at the workplace to be a well-motivated measure to facilitate the transition to fossil-free vehicles 1. Furthermore, the reduced energy tax on diesel for agriculture and forestry is considered necessary to avoid company closures 1. M also argues that increased travel deductions are justified on equity grounds 1 and that the expansion of the research and development deduction is a well-motivated increase 1.
Written by AI in advance and may contain errors. The numbers lead to the speech a statement builds on; check against the text below.
Boriana Åberg (M)
Madam Speaker! It is not customary for a report that has not prompted any motions and for which there are no requests to be debated in the chamber. Nevertheless, it is important to note the report on the government's accounting of tax expenditures.
Accountability is an essential part of a trust-based industry such as politics. In Sweden, we have the sixth highest tax burden in the world. Households' largest expense is taxes.
Many demands are placed on a perfect tax system. It must be, and be perceived as, fair. It must be simple, understandable, and transparent. And not least, it must have built-in incentives that stimulate work and lead to good economic development and growth.
Our tax system is currently very far from being perfect; therefore, it is even more important that it is transparent. Taxpayers should know how much tax is collected and what the taxes are used for. For the legitimacy and efficiency of the tax system, it is very important to have accurate reports on how the tax funds are used.
Tax expenditures can be defined as support to households and companies that arises through special rules in the tax legislation. To make the support visible, a comparison norm for the tax take must be defined. A tax expenditure arises if the tax take for a certain group or a certain category of taxpayers is lower than what is consistent with the norm.
The reporting of tax expenditures can be said to serve two main purposes. The first purpose is to make visible the support to companies and households that exists on the income side of the budget and which wholly or partially has the same function as support on the expenditure side of the budget.
The second purpose of the report is to highlight the degree of uniformity in the tax system. By reducing uniformity and increasing complexity in the tax system, it can be said that tax expenditures run counter to the principle that tax rules should be general, simple, and clear.
Social economic efficiency means that society's resources are used in an efficient way to create as much welfare in society as possible. Taxes, regardless of whether they are uniform or not, usually cause distortions and an inefficient resource allocation in society. In some cases, deviations from uniform taxation can, at least theoretically, improve efficiency and thus increase the welfare in society.
How a tax expenditure affects welfare depends on which set of values the assessment is based on, for example, what weight is placed on the distribution of assets. A commonly occurring simplification is that a measure is assumed to lead to increased welfare if the gains for those who win from a rule change can compensate for the losses for those who lose from it.
Even though it would be desirable to make a quantitative assessment of a tax expenditure's contribution to improved socio-economic efficiency, this is often not practically possible because it places great demands on data and method. A qualitative assessment, however, can often be made. Ultimately, the democratic decision-making system must evaluate the change and consider the new distribution acceptable. And that is precisely what we do in the Committee on Taxation.
Madam Speaker! I want to conclude with some news from this year's reporting of the tax expenditures.
In the budget bill for 2023, it was announced that temporary tax exemption for charging at the workplace will be introduced from July 1 this year. The purpose is to facilitate the transition to a fossil-free vehicle fleet. The introduction of the tax exemption gives rise to the new tax expenditure A39, Tax exemption for charging at the workplace.
Actively contributing to the transition of the vehicle fleet is very important, and it is precisely that type of positive and development-oriented climate measure that we must have more of instead of regulations and burdens. The loss of tax revenue that the measure leads to is therefore well-justified.
Tax expenditure F9, Reduced energy tax on diesel for work machines and vessels within the agriculture, forestry, and water industries, has been added to this year's reporting. It has arisen as a result of the temporary reductions in fuel taxation that were made during 2022 and which, according to the proposal in the budget bill for 2023, are extended until 31 December 2023.
Easing the burden for these industries in the wake of skyrocketing fuel prices is necessary if we do not want to see a widespread shutdown of companies in the countryside - thus, a well-justified tax expenditure.
On 1 January 2023, the standard amount for the deduction for travel with a private car to and from work, the so-called travel deduction, was increased from 18.50 to 25 kronor per kilometer. The deduction amount for business trips with a company car was also increased. The rule change means that tax items A11 and B5, both named Deduction for travel to and from work, increase in scope.
Deductions for costs for travel to and from work, as well as travel in the course of service, must reasonably correspond to some extent to the costs of the same. To move away from the proposed model with distance-based deductions and instead increase the flat-rate deduction for travel with a private car is therefore a highly justified tax expenditure from a point of view of fairness.
The so-called research and development deduction is expanded from July 1, 2023, by raising the amount ceiling per month from 600,000 to 1.5 million kronor. Tax expenditure D4, Reduction of employer contributions for persons working with R&D, thus increases - a very well-justified increase of this tax expenditure.
The deliberation was hereby concluded.
Source: The Swedish Parliament. The speeches come from the open data of the Riksdag, translated into English by AI, which may contain errors.