Denmark to cut corporate taxes
02 March 2013
Posted by: SAIT Technical
By AFP (News24)
Denmark's government is planning a progressive reduction in CIT from the current 25% to 22% and and increase in public spending of $1.05bn to stimulate the economy and to create 150 000 jobs.
Copenhagen – Denmark’s government on
Tuesday presented a controversial growth package that would reduce corporate
taxes and increase public spending to spur growth and create 150 000 jobs.
The centre-left coalition plan calls
for a progressive reduction in corporate taxes from the current 25% to 22%, as
well as an increase in public investment of six billion kroner (€804m or $1.05bn) to stimulate the
"We are creating jobs now, but we
are also getting Denmark ready to grab the economic recovery when the internal
slump turns,” Social Democratic Prime Minister Helle Thorning-Schmidt told a
news conference, adding that while there were no quick fixes, the growth plan
was a "step in the right direction.”
At the same time, Economy Minister
Margrethe Vestager said no new taxes would be imposed on businesses.
"We are sending a clear signal to
companies that we do not plan any new taxes and duties for businesses … This is
not just a growth package, it is a complete growth plan towards 2020,” she
The corporate tax reduction would
however not include a decrease in the tax on labour costs in the financial
sector, nor would it apply to North Sea oil extraction.
The proposal also calls for lower
energy duties for companies, an increase in planned public sector investment
and a reintroduction of tax rebates for Danes who make home improvements.
While Danish industry was positive,
the unions were not, with eight unions having written an open letter to the
prime minister complaining that reduced corporate tax would be at the expense
of public investment.
The move came one week after a
proposal to overhaul the student grant system, and a social security reform
that would force all unemployed under-30’s to pursue an education rather than
live off social security.
All three government proposals must
now be negotiated with other parliamentary parties in order to win a majority.
Although the left-wing Red Greens
are expected to vote against the government’s proposals, centre-right parties
are expected to approve them.