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Here’s what Norway’s new budget means

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Here’s what Norway’s new budget means
Finance Minister Siv Jensen presents the budget proposal to parliament. Photo: Heiko Junge / NTB scanpix
13:06 CEST+02:00
Higher fees on some electric and hybrid cars, changes to tax rules, and more expensive cinema and bus tickets are among the effects of the budget presented by Norway’s government on Thursday.

Norway’s government presented its proposal for the 2018 budget on Thursday, with finance minister Siv Jensen presenting the priorities of the current Conservative-Progress coalition government to the Stortinget parliament.

Key points presented by Jensen include lower income tax, lower tax deductions on mortgage repayments and significant changes to motoring charges.

Specifically, these proposals mean an income tax cut from 24 to 23 percent in 2018 on so-called ‘normal’ income (alminnelig inntekt).

The highest limit of tax (marginalskatt) will be reduced by 0.1 percent to 46.6 percent, the highest overall rate of tax that can be paid.

The contribution known as trygdeavgift, an equivalent to the UK’s national insurance, stays at the current 8.2 percent.

A proposed cut to standard income tax would be accompanied by reduction to tax subsidies allowed to mortgage payers, according to the proposal.

The so-called gjeldsfradraget, which reduces tax paid on a set amount of income for homeowners paying a certain amount of interest on their loans, will be slightly cut, which will have the overall result of slightly more expensive mortgages, writes broadcaster NRK in its summary of the budget.

Significant changes are also proposed to state contributions payable by motorists.

The government is proposing a system based on the range of electric cars, making cars with shorter ranges and higher charging requirements subject to higher costs. Non-chargeable hybrid cars will lose their weight subsidies, becoming subjected to charges based on emissions and weight – making their taxation equivalent to traditionally-fuelled vehicles, writes NRK.

A new “Tesla tax” will also make large electric cars more expensive, by removing one-off registration fee charges (engangsavgifter) for this type of vehicle. Electric cars over two tonnes in weight will be subject to the fee.

Norway’s moms tax, the equivalent of VAT in the UK, is increased from the relatively low current rate of ten percent to 12 percent in the 2018 budget. This will make cultural services and public transport – such as visits to the cinema and taking the bus – more expensive than current prices.

Television licenses are also slated for a price hike, with the NRK license set to increase by 55 kroner to 2,922.70 kroner (312 euros) annually. 

READ ALSO: Norway dips deeper into oil riches in 2017 budget

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