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Norway pledges to spend less oil money in new budget

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Norway pledges to spend less oil money in new budget
Finance Minister Siv Jensen. Photo: Tore Meek / NTB scanpix
16:22 CEST+02:00
Norway’s government is set to reduce spending by 5.6 billion kroner (580 million euros) in a revised national budget.

2.7 percent of the money in the country’s sovereign wealth fund will be used to help fund the country's spending, NRK reports.

That is a reduction from 2.9 percent, the amount of the country’s oil profits used in the previous budget, according to the report.

Oil funds spent by the Norwegian state are reported to reach 225.5 billion kroner (23 billion euros) in 2018 once the revised budget is taken into account, NRK writes.

“We are trying to take into consideration as many political aims as possible with the revised budget. This is a puzzle in which we are trying to make the pieces fit together,” finance minister Siv Jensen told NRK on Tuesday morning.

The Ministry of Finance said in the revised budget that it expects the country’s ‘mainland’ economy to grow by 2.5 percent.

The budget also includes a provision to make tax rules simpler for foreign professionals working in Norway, NRK reports.

Foreign citizens will pay a flat tax rate of 25 percent for an initial – as yet undefined – limited period in an attempt to simplify the system for newcomers, the broadcaster writes, providing the revised budget is passed.

That means that current tax deductions will not apply in the initial period of working in Norway, making rules easier to both understand and enforce, the broadcaster reports.

In the budget passed by the previous cabinet in October 2017, income tax was cut from 24 to 23 percent in 2018 on so-called ‘normal’ income (alminnelig inntekt), while the highest limit of tax (marginalskatt, the highest overall rate of tax that can be paid) was reduced by 0.1 percent to 46.6 percent.

READ ALSO: Here’s what Norway’s autumn 2017 budget means

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