Lower municipal taxes in sight

A deal worked out by Kommunernes Landsforening and the government could pave the way for tax cuts

Stephen Gadd

The government has decided to give extra money to municipalities who lower taxes in 2018.

“For many years, increasing municipal taxes were a recurring feature that contributed to raising the total tax burden. They have been held in check for the last couple of years and it is really good news if it is possible to reduce them,” said Geert Laier Christensen from the business interest organisation Dansk Erhverv.

The government has agreed with Kommunernes Landsforening that it will create a pool of 450 million kroner that can be used to support municipalities that cut taxes.

More freedom to prioritise
According to the economy and internal affairs minister, Simon Emil Ammitzbøll, the pool will cover up to 75 percent of the shortfall in tax revenue that could result from the cuts.

READ ALSO: Danish municipalities warn that refugee expenditure is growing by the billion

“It ought to give municipalities greater freedom to prioritise time and resources on the things that create value for their citizens,” said Ammitzbøll.

Simplifying the processes
The minister also pointed out that the deal should mean a simplification of the rules for things such as social housing, so that municipalities will be able to erect affordable housing when it is needed.

“I’m certain this agreement will enable municipalities to do their jobs easier, and it will also provide greater job satisfaction because the amount of paperwork will be reduced,” the minister added.

The parties have also agreed that municipalities will be given 17 billion kroner for infrastructure-related expenses in 2018.

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