The Swedish government has announced a plan to reduce value added tax on food to 6 percent in 2026 in an effort to stimulate household spending and strengthen economic growth. The decision was confirmed by Prime Minister Ulf Kristersson who said the measure is designed to encourage both households and businesses that have been cautious due to ongoing economic uncertainty.
Deputy Prime Minister Ebba Busch explained that the VAT cut will provide relief for families under financial pressure. The reduction will be temporary, starting in April 2026 and lasting until December 2027. The move forms part of the right wing coalition’s proposed budget for 2026 which was presented last week. The budget, which comes in an election year, includes 80 billion crowns of unfinanced measures.
The government expects Sweden’s gross domestic product to grow by 0.9 percent this year and to rise to 3.0 percent in 2026. Economists believe that the budget bill, which will be delivered to parliament on September 22, could also feature further tax reductions on income and corporate profits along with higher levels of public spending.
The planned VAT cut is seen as one of the most significant steps taken by the government to increase consumer confidence and support the economy ahead of the 2026 election.
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