Factsheet for measure
SE-2022-1/2375
–
Updated
– measures in Sweden
Lower tax on diesel for companies in forestry, agriculture and aquaculture
Sänkt skatt på diesel inom jord-, skogs- och vattenbruk
Background information
Due to the current cost of energy and raw materials, the viability of many agricultural companies’ operations in Sweden is threatened. The situation has been exacerbated by the war in Ukraine. To support the companies’ survival as well as to secure continued domestic food production in Sweden, the government has decided on financial support for the agriculture, forestry, fisheries and aquaculture enterprises in terms of tax reduction on diesel. The tax reduction increase requires an amendment in the The Act on Tax on Energy 1994:1776 (Lag om skatt på energi).
This measure is closely linked with
Additional support for agricultural and fishery enterprises
, as they are both part of the same package.
Content of measure
The government proposed in their spring budget amendment to temporarily increase the tax reduction for diesel used in agriculture, forestry, and aquaculture by 2 SEK per litre, on top of the pre-existing tax reduction. The estimated fiscal cost was SEK 700 million.
The measure is part of a support package valued up to SEK 1 billion. The package also included a
direct subsidy to some agricultural producers
.
Due to war in Ukraine, prices for agricultural inputs continue at a high level. Thus, the government of Sweden has expanded the tax reduction on diesel making it valid retroactively. Thus, eligible producers will get an enhanced tax refund on their diesel use over the period 1 January 2022 to 30 June 2023. The amendment is planned to enter into force on 1 July 2022. The tax refunds are expected to have a fiscal burden of SEK 400 million.
A proposal of
additional hand-outs to the industry was made due to the war in Ukraine
.
Updates
The following updates to this measure have been made after it came into effect.
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22 April 2024
|
In April 2024 the Government proposed to extend and increase the tax reduction on diesel used in professional agricultural, forestry and aquaculture activities. The tax reduction should apply to diesel consumption that takes place in 2025. The proposal is part of the Government fiscal plan for 2025 and is waiting for approval by the Swedish Parliament in December 2024. The amendments are proposed to enter into force on 1 January 2025.
|
|
07 September 2023
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The government proposed that the measure be extended to apply also in 2024. The argument behind yet another extension was the continuing difficult economic situation and high inflation affecting the sector. A change to the refunding of the tax were changed to be made per quarter year instead of per calendar year. The proposal was approved by the Parliament (Sveriges Riksdag) in November 2023.
|
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31 May 2023
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The measure has been extended until the end of 2023 and will mean a tax relief of about SEK 380 million (about €32 million) and in practice a zero tax on diesel, for companies in the affected industries. The overall support package for the agriculture sector, which this measure is a part of, has been increased to SEK 3,1 billion (€263 million).
|
Use of measure
The government estimates that around 26,000 businesses in the agricultural, forestry and aquaculture sectors are covered by the reduction, most of which are small enterprises.
In March 2023, when the measure was extended until the end of the year, the government announced that the tax relief would affect around 25,000 businesses.
Target groups
Actors and funding
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Actors
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Funding
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National government
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National funds
|
Social partners
Social partners' role in
designing the measure
and form of involvement:
|
Trade unions
|
Employers' organisations
|
|
Role
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Consulted
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Consulted
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Form
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Direct consultation outside a formal body
|
Direct consultation outside a formal body
|
Social partners' role in the
implementation, monitoring and assessment phase:
-
Unknown
-
Main level of involvement: Peak or cross-sectoral level
Involvement
Social partners were invited to leave a statement.
Views and reactions
The Confederation of Swedish Enterprise [Svenskt Näringsliv] approves of the measure and argues that from a climate perspective it is well balanced considering that Sweden otherwise would have to rely on food imports.
Sectors and occupations
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This case is sector-specific (only private sector)
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Economic area
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Sector (NACE level 2)
|
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A - Agriculture, Forestry And Fishing
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A1 Crop and animal production, hunting and related service activities
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A2 Forestry and logging
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A3 Fishing and aquaculture
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This case is not occupation-specific.
Sources
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14 February 2022: Support package for agricultural businesses in the spring budget for 2022 (Stödpaket till lantbruksföretag i vårändringsbudgeten för 2022)
(www.socialdemokraterna.se)
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03 March 2022: Statement from Confederation of Swedish Enterprise (Remiss från Svenskt Näringsliv): diesel
(www.svensktnaringsliv.se)
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09 March 2022: Government decides to extend tax reduction on agricultural diesel
(www.regeringen.se)
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25 April 2022: Additional billions to Swedish Agriculture and Fisheries (Nya miljarder till lantbruk och fiske)
(www.di.se)
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25 May 2022: Support package to agriculture and fisheries due to the Russian invation of Ukraine (Stödpaket till lantbruksföretag och fiskerinäring med anledning av Rysslands invasion av Ukraina)
(www.regeringen.se)
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30 November 2023: Sveriges Riksdag (2023) 'Sänkt skatt på bensin och diesel och sänkt skatt på jordbruksdiesel'
(www.riksdagen.se)
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22 April 2024: Regeringen (2024) 'Sänkt skatt på jordbruksdiesel under 2025'
(www.regeringen.se)
