Question

Features of Direct tax

Answer 1

1 Direct and Indirect Taxes – Main Features of the Proposal

The objectives of the Government’s tax policy are to safeguard revenue for communal purposes, contribute to fairness in distribution and an improved environment, promote employment throughout the country and enhance the workings of the economy. By reverting aggregate direct and indirect taxes to the 2004 level, the Government has made it possible to strengthen welfare schemes and communal benefits. At the same time, the distributional profile of the tax system has been improved as a consequence of the introduction of dividend tax, an increase in the basic allowance, as well as a fairer and higher wealth tax.

The main tax policy concerns are pursued in the proposed changes in direct and indirect taxes for 2008:

Overall direct and indirect taxes to be maintained at the 2004 level.

The distributional profile of the tax system shall be further strengthened. The Government improves the distributional profile of the wealth tax by expanding the tax bases and increasing the minimum allowance.

The system changes from the tax reform shall be preserved by, inter alia, preventing increases in the difference between the tax rates on labour income and capital income. This ensures that the tax system is stable and predictable, which is an important factor in making it attractive to invest and engage in business activities in Norway.

The tax system shall promote environmentally sound conduct. Considerable weight is attached to environmental and energy taxes.

Overpriced government fees to be reduced to bring such fees more in line with actual costs.


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