Norway is said to be considering cutting so-called ‘sin taxes’ on sugary food and beverage products and alcohol in an attempt to boost its economy.
News agency Reuters reported the country’s government, which introduced the high taxes to improve the country’s health, is concerned the economy is suffering because many consumers hop over to neighbouring Sweden and stock up on products that are significantly cheaper there.
Norway’s ruling party has proposed cutting the taxes after measures introduced because of coronavirus showed the hit to the economy.
Norway and Sweden closed the traditionally open borders between the countries in mid-March to help curb the spread of Covid-19, triggering a jump in domestic retail sales, especially in regions bordering Sweden.
Norwegian authorities are keen to keep boost to trade going even after any return to open borders.
Vetle Wang Soleim, a Conservative MP on a party committee that presented the tax cut proposal, told Reuters: “The closure of borders because of the coronavirus created a full-scale experiment in what happens when all trade is moved back to Norway.”
The borders are open at the moment but Norway has imposed a ten-day quarantine on people returning from abroad, which has deterred shopping runs to Sweden.
Norway increased the tax level on confectionery and sweets in January 2018 by 80%, irrespective of their sugar content.
Asked by just-food about possible changes to the sugar tax level, a spokesperson for the Norwegian government said it cannot comment on any such proposals before the country’s Budget is presented on 7 October.