Budget|The tax increases especially affect sweets and tobacco. The value added tax on many products will be increased and the household deduction will be reduced.
Government told about his proposal for next year’s budget on Tuesday. If the parliament approves the budget proposal as it is, not only savings but also tax increases will come into effect at the beginning of next year.
With the tax cuts, the government aims to increase the state’s tax revenues by a total of approximately 1.4 billion euros. The largest share of this comes from the increase in the general value added tax rate from 24 percent to 25.5 percent.
This decision, made during last spring’s budget dispute, came into force already this week, but it will increase the government’s income next year as well.
Particularly tax increases hit sweets and tobacco.
The VAT rate on sweets will rise from the current 14% to 25.5%. The tobacco tax, on the other hand, will be raised in two installments: first at the beginning of November 2024 and the second time at the beginning of July 2025.
Also taxation of spirits will be increased from the beginning of the year. If implemented, the change will raise the price of spirits in retail sales by an estimated 1.1 euros per liter by 2027. The taxation of tentacles and other mixed drinks with less than 10% will not increase.
From the calculator below, you can try how these changes affect the price of your own consumption habits.
Also reductions are planned for the household deduction: it is planned to be cut by a total of around 100 million euros.
About half a million people take advantage of the household deduction every year.
From the calculator below, you can try how the changes will appear in your own wallet.
In addition in accordance with the decision in the government program, the goods that currently fall under the reduced VAT rate of 10 percent will be transferred to the 14 percent tax rate, with the exception of newspapers and magazines, from the beginning of the year.
In practice, this means, for example, medicine fees, public transport tickets and ticket and entrance fee prices for culture and sports.
With the calculator below, you can try how changes in the VAT rate affect the price of local tourism.
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