Sunday, January 16

These changes will affect your finances from New Year

A number of taxes, fees and schemes change from New Year, and they can have a major impact on your personal finances. These are some of the most important.

Jonas Gahr Støre (Labor Party) and Trygve Slagsvold Vedum (Social Democrats) had to have support from Audun Lysbakken (SV) to get support in the Storting for the changes in the state budget.

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The transition from the Solberg to Støre government will be felt in the tax policy from the New Year. Then come some of the first changes the Labor Party and the Center Party, with support from SV, will introduce.

  • Wealth tax: The bottom deduction in wealth tax is increased from NOK 1.5 million to NOK 1.7 million. This means that more people with low wealth do not have to pay wealth tax. At the same time, the government is increasing the wealth tax from 0.85 per cent to 0.95 per cent, so those who have a fortune of more than NOK 1.7 million must pay more.
  • The step tax: The government reduces the entry point for the upper steps and raises tax rates. Income over NOK 643,000 is taxed higher than before. The government is also introducing a fifth step, which has an entry point of NOK 2,000,000 and a rate of 17.4 per cent.
  • Free card: The exemption card limit increases from NOK 60,000 to NOK 65,000 next year.
  • Trade union dues: The government increases the deductions for trade union dues from NOK 3,850 to NOK 5,800. In the Hurdal platform, the Labor Party and the Center Party have said that they will double the deduction from the current level. This means that the deduction will be up to NOK 7,700.
  • Deductions for gifts: Previously, you could have received a deduction for gifts to voluntary organizations of NOK 50,000, but this is now reduced to NOK 25,000.
  • Gains and losses on shares: From New Year, the upward adjustment factor for shares will be increased from 1.44 to 1.6. This means that the tax you have to pay for dividends and realized gains on shares will increase, while the deductions you can claim for losses on shares will also increase.
  • IPS: The government changes the maximum amount you can save in individual savings for retirement (IPS) from NOK 40,000 to NOK 15,000.
  • Share savings in companies: The Solberg government wanted to stimulate more employees to buy shares in the company they were employed in. Therefore, they increased several times the tax-free advantage employees had when buying shares at a discount. The Støre government is abolishing the scheme, based on the fact that the scheme mainly benefits people with high incomes, and that they believe the closure will have a distributive effect.
  • CO₂ fee: The taxes on greenhouse gas emissions will increase. For petrol, the CO₂ tax will increase by 28 per cent, from NOK 1.37 to NOK 1.78 per liter.
  • Tobacco: The government increases tobacco taxes by 5 percent.
  • The tax-free quota: The government has changed the tax-free quota, so that it is no longer possible to replace the tobacco quota with alcohol.

Per-Ole Hegdahl, lawyer and adviser in the Taxpayers’ Association, points out the increased tax on share dividends and gains, the wealth tax and increased income on tax for those with high incomes, which the three changes they believe will have the strongest impact.

– The change of government does not entail dramatic changes in the tax rules or in the rates. But it is a clear change of direction, there is no doubt about it. Those who are wealthy have to settle for paying more in taxes, says Hegdahl.

This is the first budget the Støre government has had any control over, but it is still only a change in Erna Solberg’s latest state budget.

The first state budget Prime Minister Jonas Gahr Støre and Minister of Finance Trygve Slagsvold Vedum have full control over, will come next year.

– I expect that the government will continue in the same direction also in the future. They have had a short time this time, and will probably be careful with big changes so early. When they get a whole year, we will probably see that the budgets are strengthened in the same direction, says Hegdahl.

Read on E24 +

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