Reporting of tax expenditures 2025
Translated from Swedish by AI; the translation may contain errors. The Swedish text is the original.
Summary AI, written in advance
S considers tax expenditures to be a hidden support that can be used to promote growth or level inequalities 1. S argues that the government's policy focuses on prioritizing those with high incomes and widening the gaps 1. S wants a transparent tax system where everyone contributes according to their ability 1. S accuses M of hiding the effects of its policy and acting for redistributive reasons 2 3. M argues that welfare is created by those who work and that tax cuts stimulate work and growth 4 5. M emphasizes that the job tax credit is a large tax expenditure that benefits those who work 4. M argues that tax cuts are fair and encourage responsibility 5. M highlights that the government has abolished several taxes and simplified regulations to promote innovation 6.
Written by AI in advance and may contain errors. The numbers lead to the speech a statement builds on; check against the text below.
Niklas Karlsson (S)
Madam Speaker! Tax expenditures are not a subject that usually makes any major headlines, but which I nevertheless think deserves to be highlighted. Let me explain why.
Unlike the expenditures seen in the state budget, for example expenditures for school, healthcare, infrastructure or defense, tax expenditures are a kind of hidden support. It concerns special rules in the tax legislation that lead to the state receiving less revenue. It is therefore not money that is paid out directly, but money that never comes in. But the effect is the same: It costs society.
Tax expenditures are, therefore, fundamentally about which interests we as parties represent, what kind of society we want to shape, and which matters we choose to define as common.
Madam Speaker! Tax expenditures can therefore be designed from different perspectives. Technically, they can be used to stimulate certain desirable behaviors or to contribute to increased legitimacy for the tax system and to make it perceived as both simpler and fairer.
From a growth and efficiency perspective, tax expenditures can be justified to promote innovation, investment, and employment. Take, for example, the rotavdrag, which in the best case can reduce black market work in the construction industry but also, as a temporary measure in a recession, stimulate growth.
From a distributional policy perspective, tax expenditures can contribute to leveling inequalities in society. A reduced VAT on food is a classic example; it benefits households with lower incomes to a greater extent, as they spend a larger portion of their budget on food.
But, Madam Speaker, the opposite naturally also applies. Herein lies the problem with the policy we see from the bourgeois government and the Sweden Democrats. The government's overall policy, from a distributive policy perspective, is almost exclusively focused on prioritizing those groups and people who already have high incomes and large assets.
Instead of holding the country together, representing broad wage groups and leveling already large differences, they deliberately widen the gaps. Tax cuts are targeted at those who are already well-off.
Madam Speaker! It is admittedly hardly surprising that the pursued policy reflects a bourgeois view of society, where those who already have are to get a little more. That is fundamentally this government's mandate. But it is not just a choice of policy but a social model where each individual is expected to be the architect of their own fortune. It is both unjust and outrageous.
Madam Speaker! We Social Democrats represent completely different interests and stand for a completely different view of society and humanity, which is also reflected in our way of formulating policy and tax policy.
We want a tax system that is transparent, fair and understandable – a system based on the principle that everyone contributes according to their ability and that resources are distributed so that society holds together. Here, tax expenditures may have a role to play, but they must be used wisely and sparingly and with the aim of strengthening the sense of community, not undermining it.
Madam Speaker! Politics is about making choices. And we Social Democrats choose a Sweden that holds together, not one that slides apart.
Boriana Åberg (M)
Madam Speaker! Today we are debating the government's communication Reporting of tax expenditures 2025, in which the government accounts for tax expenditures, that is, the effects on tax revenues that arise as a result of special rules in the tax legislation.
I must admit that my colleague Niklas Karlsson succeeds in the feat of elevating something that is usually a rather technical debate – the few times it becomes a debate at all – to unimaginable ideological heights.
It makes me want to remind Member Karlsson that if there is to be any welfare to distribute, someone must create this welfare. It is the people who work hard, who choose to educate themselves and who choose to spend many hours at work who create the welfare. It always becomes difficult when the Social Democrats try to divide society by portraying police officers, nurses and school leaders as "the rich".
Madam Speaker! I shall now return to the subject. The word tax expenditure has different meanings depending on the perspective. For individuals and companies, tax expenditure is what one pays in tax, and it is often the largest expense in a household. For me, it is actually the only reasonable perspective.
To designate reduced tax revenues as an expense is a somewhat strange arrangement, which practically everyone active outside the tax-funded sphere would object to more or less forcefully. But now we have that arrangement, and sometimes one simply has to accept that it is as it is.
Madam Speaker! Accountability and transparency are an essential part of a trust-based sector such as politics. In Sweden, we currently have the eighth highest tax burden in the world – approximately 7 percentage points above the OECD average. Even though the tax burden still ranks among the highest in the world, it is today, thanks to the Moderat-led government, lower than it has ever been since the 1970s.
As we heard in the previous speech, a connection is often made between high taxes and generous welfare. I still think that is wrong. The logical connection instead lies between high growth and generous welfare. And high growth is only achieved by encouraging work, education, and entrepreneurship, not by taxing them into oblivion.
Madam Speaker! 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, and therefore it is even more important that it is transparent. Taxpayers should be informed about 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.
As said: 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 exist on the revenue side of the budget and which wholly or partially have 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.
Socio-economic efficiency means that society's resources are used in an efficient way to create as much welfare in society as possible. Taxes cause, regardless of whether they are uniform or not, usually distortions and an inefficient resource allocation in society. In some cases, deviations from uniform taxation can – at least theoretically – improve efficiency and thus raise the welfare in society.
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 qualitative assessment of a tax expenditure's contribution to improved socio-economic efficiency, this is often not practically possible, as it places great demands on data and methodology.
A qualitative assessment can, however, often be made. Ultimately, the democratic decision-making system must evaluate the change and consider the new distribution to be acceptable. And that is precisely what we do in the Committee on Taxation.
Even though I think the term tax expenditure is strange in this context, I think it is a good principle to make this open and transparent reporting, and it is very interesting to take part in.
I can state, among other things, that the single largest item appearing in the reporting is the job tax credit – almost 200 billion kronor in 2025. It is actually over 200 billion if one includes the job tax credit for the elderly. It is 200 billion that hard-working people have been able to keep as the fruit of their labor, which has given them all a better welfare and contributed to stronger incentives for work and economic growth.
Madam Speaker! The report also provides a clear picture of a tax system that is anything but simple and uniform. No fewer than 154 deviating items are noted. There is undoubtedly potential when it comes to simplifying the tax system.
Niklas Karlsson (S)
Madam Speaker! When Member Åberg says that I am elevating a technical debate to unknown ideological heights, I must admit that I take it as a compliment. To reciprocate, I shall say that Member Åberg did not have such difficulty catching that ball either.
It is, after all, in the details that the devil lies. Let us delve a little deeper into today's matter regarding tax expenditures. Until 2021, the choice was made to conduct in-depth analyses of individual tax expenditures from the perspective of socio-economic efficiency. After that, these reports and in-depth analyses no longer exist, even though the committee has on a few occasions pointed out that they have welcomed this and want it to be included.
At the same time, I hear Member Åberg, Moderaterna, say that there should be an open and transparent accounting. There is talk of work and growth. Then I think that if one wants the tax expenditures they propose to contribute to increased growth, full employment, and reduced unemployment, why do they then not want to report how this hits and what effects it has in terms of the macroeconomy and on macroeconomic efficiency?
Then only the question remains whether this is being done for other reasons – perhaps for distributional policy reasons – and that this is rather about something else than increasing growth and reducing unemployment. It may rather be about implementing measures that already favor the interests that the Moderaterna represent – that is, the people who already have high incomes and large assets.
My question – or perhaps even my assertion – to the Moderaterna and Member Åberg is: What is it that applies, and why do you think this should not be reported?
Boriana Åberg (M)
Madam Speaker! It is interesting that Niklas Karlsson brings up that specific analysis. The first time it disappeared was actually during Stefan Löfven's government. This prompted, among other things, a report from the National Audit Office where it was pointed out that that type of analysis might be good to have. So we are probably not alone in this.
When it comes to Niklas Karlsson's claim that tax cuts and the measures the government takes would be directed to benefit those who already have, I think it is a directly immoral claim.
Why doesn't Niklas Karlsson, for example, say that a high-earning person who earns four times as much as the median wage in Sweden without complaining pays more than eight times as much in tax as a person with a median wage? This is, therefore, with the moderate tax cuts included.
Does Niklas Karlsson think it is fair or not that someone who earns four times more pays more than eight times more in tax? How do we encourage people to take responsibility and educate themselves, start companies and work weekends and nights if they cannot keep at least a small part of the welfare they generate?
Niklas Karlsson (S)
Madam Speaker! In our country, there is mass unemployment. It is approaching 10 percent. Growth is at the bottom of Europe. When the government stands helpless and we have a Minister for Employment who takes a sleeping pill, it will of course not get better by choosing to hide the effects of the policy one advocates. I would rather assert that in light of this, it is even more important and even more urgent to look at what socio-economic effects the political measures have.
Madam Speaker! For three years now we have lived with a moderate, bourgeois, Sweden Democrat government. The only thing the Moderate Member is able to speak about is the time before the change of government – about Stefan Löfven's government. No, that will not do.
This only shows that the policy you are implementing does not aim to increase growth – you hope for it. It does not aim to reduce unemployment – you hope for it.
This is being carried out for distributional policy reasons. This is about giving more to those who already have, and therefore one does not want to speak about what effects the pursued policy has when it comes to increasing growth, increasing employment and reducing unemployment. That is the message we receive in the Swedish Riksdag today from the Moderaterna and Boriana Åberg.
Boriana Åberg (M)
Madam Speaker! It is not true that I have not told about all the good things the government has done for increased growth. But if Niklas Karlsson wants to hear them once more, I will gladly repeat them. Abolished tapering of the job tax credit – self-financed – makes people work more. We have increased the job tax credit for everyone who works – especially for those with low and medium incomes and for pensioners who work. We have abolished the aviation tax, abolished the plastic bag tax, abolished the waste incineration tax and increased the rot deduction – admittedly temporarily, but very highly desired by the construction industry.
Reporting of tax expenditures 2025
When it comes to facilitating for companies, the 3:12 rules are being reformed. Part of this is that 60,000 companies will receive a tax reduction, but the most important thing is that the regulatory framework becomes much simpler. A lot of unnecessary reporting will disappear. This will encourage innovation and more people will dare to start companies – and hopefully hire more people.
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.