Sweden (CK) – Sweden introduces tax breaks for repairs in bid to cut waste
The Swedish government has proposed several tax changes designed to incentivize consumers to repair broken items instead of discarding them.
Lawmakers from the ruling Social Democrat and Green Party coalition added provisions into the most recent budget, reducing Sweden’s value-added tax for all bike, clothing and shoe repairs to 12 per cent from 25 per cent. In addition, households that pay to repair appliances such as washing machines will be eligible for a tax deduction. The two initiatives are projected to cost the national treasury $114 million annually, but will be partially offset by a controversial new levy on electronics that contain chemicals the government describes as dangerous to humans. These include the fire retardant pentaBDE, often found on cellphone covers. The initiatives will be voted on later this month, but are widely expected to pass.
Deputy finance minister Per Bolund argues this change will nudge Swedes to pursue a more sustainable form of consumption that values quality goods over disposable items. The government is looking to bolster the domestic repair industry, which has been aided in recent years by the rise of the maker movement and the sharing economy more broadly. Tax incentives will act to even out the current imbalance between the cost of repairs and replacement, which is often cheaper due to the pool of inexpensive labour available abroad.
“We also know that repairs are more labour-intense than production, which has been largely automized, so expanding repairs could actually contribute to an expanding labour market and a decrease in unemployment,” said Bolund in a recent interview with the World Economic Forum. “Especially because repair services often require high skills but not very high education, so we believe there’s a currently unemployed part of the labour force that could benefit.” Most of the repair jobs created will stay in the country, providing further economic benefits, he says.
Sweden has made great strides in tackling carbon emissions, cutting emissions 23 per cent over the past quarter-century. But it has struggled to address the global environmental impact from Swedish consumption patterns, along with the difficulties associated with disposal. The country diverted 58,000 tonnes of electronic and household goods from landfills in 2015.
This report prepared by Corporate Knights.