Waste not want not: Sweden to give tax breaks for repairs
Government to tackle ‘throwaway culture’ by cutting VAT on fixing everything from bicycles to washing machines.
Swedes may also be able to claim back from income tax half of the labour cost on repairs. Photograph: Phil Banko/Getty Images
The Swedish government is introducing tax breaks on repairs to everything from bicycles to washing machines so it will no longer make sense to throw out old or broken items and buy new ones.
Sweden’s ruling Social Democrat and Green party coalition is set to submit proposals to parliament on Tuesday to slash the VAT rate on repairs to bicycles, clothes and shoes from 25% to 12%.
It will also submit a proposal that would allow people to claim back from income tax half of the labour cost on repairs to appliances such as fridges, ovens, dishwashers and washing machines.
“We believe that this could substantially lower the cost and so make it more rational economic behaviour to repair your goods,” said Per Bolund, Sweden’s minister for financial markets and consumer affairs and one of six Green party cabinet members.
Bolund has been a key figure in driving through the new incentives. He estimates that the VAT cut will reduce the cost of a repair worth 400 SEK (£36) by about 50 SEK, enough to stimulate the repair industry in Sweden.
He hopes the tax break on appliances will spur the creation of a new home-repairs service industry, providing much-needed jobs for new immigrants who lack formal education.
The incentives are part of a shift in government focus from reducing carbon emissions produced domestically to reducing emissions tied to goods produced elsewhere.
Sweden has cut its annual emissions of carbon dioxide by 23% since 1990 and already generates more than half of its electricity from renewable sources.
But emissions linked to consumption have stubbornly risen. Bolund said the policy also tied in with international trends around reduced consumption and crafts, such as the “maker movement” and the sharing economy, both of which have strong followings in Sweden.
“I believe there is a shift in view in Sweden at the moment. There is an increased knowledge that we need to make our things last longer in order to reduce materials’ consumption,” he said.
The proposals will be presented in parliament as part of the government’s budget proposals and if voted through in December will become law from 1 January 2017.