Sweden to reduce the VAT rate on foodstuffs from 12% to 6% as of 1 April 2026

Sweden to Halve VAT on Foodstuffs Starting April 2026

In a bold move to ease household financial pressure and stimulate economic recovery, the Swedish government has announced a temporary reduction in the VAT rate on foodstuffs from 12% to 6%, effective 1 April 2026. This measure will remain in place until December 2027.

Why the Cut?

Persistent inflation and sluggish post-pandemic growth have prompted the government to act. Despite recent interest rate reductions, Swedish families continue to feel the pinch from rising grocery prices and global trade uncertainties. Finance Minister Elisabeth Svantesson emphasized that the VAT cut is part of a broader economic relief package aimed at restoring consumer confidence and boosting demand.

Monitoring Retail Prices

To ensure that the VAT savings are passed on to consumers, the government will establish a “food commission” tasked with monitoring price trends—particularly within Sweden’s highly concentrated supermarket sector. Authorities have already raised concerns about weak competition and summoned grocery executives earlier this year to address pricing practices.

Additional Support Measures

Alongside the VAT reduction, the government plans to:

Increase housing allowances for low-income families (costing 655 million SEK)
Introduce further income and corporate tax relief
Balance rising expenditures linked to NATO commitments and the green energy transition

This VAT cut marks a significant shift in Sweden’s fiscal strategy, signaling a renewed focus on consumer welfare and market fairness.

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