Sweden Proposes Tax Breaks For Repairs
RACHEL MARTIN, HOST:
In a world of consumerism and mountainous landfills of castoffs, legislators in Sweden are hoping a proposed tax break will encourage people to fix things instead of throwing them away. Per Boland is Sweden's finance and consumption minister. He joins us on the line from Stockholm. Welcome to the program.
PER BOLAND: Thank you very much.
MARTIN: Tell us how this would work.
BOLAND: Well, actually, it's two different schemes that we are working on that will be introduced on the 1st of January in 2017. So the first is to lower the VAT on repair services on bikes and clothing and shoes, for example.
MARTIN: That's the value added tax on those things?
BOLAND: Yeah, exactly. So we have that, so from 25 percent tax to 12 percent tax. So that will lower the cost substantially. Now, the other scheme is to have a deduction on your income tax when you repair your white goods at home, so refrigerators or washing machines and the likes.
MARTIN: So any time an appliance breaks down - if my refrigerator breaks, and I live in Sweden, then I just keep the receipt that showed I had a repairman come, and then I can use that on my income taxes?
BOLAND: Yeah. Well, actually, it's even simpler. So it's deducted from the bill directly when you pay for the labor.
MARTIN: Is that part of the culture in Sweden - getting things fixed? Are residents excited about this idea?
BOLAND: Actually, they are excited. And I think that the problem is that it has gone out of our everyday life and our habits. So we've gotten used to, as in many other parts of the world - to just buying cheap stuff and then throwing it away as soon as it gets destroyed or that there is a scratch or it doesn't look good or something. That is a problem from a sustainability standpoint. We also believe that this will encourage people to perhaps buy more high-quality products.
MARTIN: I mean, there are some lovely high-quality items you can buy at Ikea, but we should also point out Ikea is based in Sweden. It's a Swedish company, and there's a lot of cheap stuff you can buy there, too, that doesn't necessarily last that long.
BOLAND: No, that's right. Absolutely. So as I said, Sweden has also become part of the buy-and-throw-away culture. And we believe that we need policies to change the economic rationale around that, to make rationale to actually use your items longer and repair them instead.
MARTIN: Parliament will vote on the proposals in December. What's the likelihood they'll pass?
BOLAND: Well, it's a very big likelihood. We have a strong tradition in Sweden that the budget bill is passed through Parliament. My hope is that also the opposition parties will see that this is a very good way to both lower the emissions and the environmental effect of consumption and, at the same time, actually create jobs in the repairing businesses.
MARTIN: Per Boland is finance and consumption minister in Sweden. He spoke to us from Stockholm. Mr. Boland, thanks so much for taking the time.
BOLAND: Oh, thank you.
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