Government looking to reduce car registration tax with new package proposal – The Post

Government looking to reduce car registration tax with new package proposal

Better work incentives and immediate top tax bracket increase among the other initiatives

A helping hand all around? (photo: Regeringen.dk)
August 29th, 2017 10:19 am| by Christian W
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The government has unveiled its latest tax proposal to reduce taxation in connection with working, cars and pensions by a total of 23 billion kroner.

The proposal, ‘Jobreformens fase II’ (‘Job Reform Phase II’), hopes to push more Danes away from the doldrums of public support and into the realm of self-sustainability.

“We want to promote a society in which it is easier for people to support their own before they’re required to give a large chunk of their income to finance the costs of society,” wrote the government.

“A society in which normal and hardworking Danes have more economic relief on a daily basis and are able to keep a bit more for themselves when they earn more. A high marginal tax is detrimental to growth and employment.”

READ MORE: Danish government announces reform of benefits: It should pay to work

Work incentivisation
According to the government, the tax proposal (here in Danish) will lead to about 21,000 Danes getting more out of working.

Among the points of the proposal, the government wants to lower the car registration tax so that no-one will pay more than 100 percent in car registration tax.

The government also wants to remove the ceiling of the employment deduction (beskæftigelsesfradrag), which is currently at 30,000 kroner – this will benefit everyone with an annual salary of over 340,000 kroner.

The government also wants to make a new job deduction of 4,500 kroner earmarked for the lowest work incomes, as well as a social free card that allows vulnerable citizens to earn an extra amount tax free.

 

The Job Reform Phase II


– Job deduction for the lowest earners that will give a tax break of up to 4,500 kroner, which is aimed at full-time workers with low incomes. It aims to significantly incentivise working

– A social free card for 2018-2020 that will help the socially vulnerable enter the labour market

– The ceiling for the employment deduction is raised and removed in order to reduce the tax on the last-earned kroner and to not punish those who work extra hard

– A quicker phasing in (2018 instead of 2022) of the previously agreed raising of the top tax bracket

– The free phone tax is removed

– A new tax deduction for pension payments will make it more attractive for people to pay into their own pensions

– Paying into a pension will grant people the right to employment deduction – as opposed to the current model, which doesn’t allow it

– The equaliser tax on income from pension savings is removed as of 2018

– Car registration tax to be reduced to 100 percent across the board, making it more affordable to purchase a vehicle