The Government of Norway has presented its draft state budget for 2027, which includes a package of tax cuts totalling 6.4 billion Norwegian kroner (NOK).
The Labour government of Jonas Gahr Støre aims to improve households' disposable income and employment incentives, primarily through lower social security contributions and higher tax-free allowances.
Main measures of the tax cut:
- Income tax on labour: the tax burden for wage earners will be reduced. For example, an employee with an annual salary of 750,000 NOK will pay approximately 1,750 NOK less in taxes.
- Tax-free allowance: the tax-free threshold will increase from 114,540 NOK to 120,180 NOK.
- Social security: the social security contribution on ordinary wages will decrease from 7.6% to 7.4%.
- Progressive tax brackets: the limits of all brackets will increase by 4% (with rates remaining the same); the first bracket will start at 235,150 NOK and the highest at 1,525,900 NOK.
- Wealth tax: the general rate will remain at 0.65%, but the threshold for application will rise to 1.99 million NOK.
- Fuels and transport: a reduction in the road tax for fuels is planned, although it is expected to be partially offset by an increase in the CO₂ emissions tax.
- Counterpart: these cuts are accompanied by an increase in regulated energy costs (such as the national system Norgespris)