Sweden wants to give tax breaks for fixing things instead of throwing them away

Sweden is planning to introduce tax breaks and deductions to those who repair objects and appliances rather than throwing them away. A great example of circular economy.

Sweden’s Ministry for financial markets and consumer affairs has proposed to introduce tax breaks to citizens who repair broken objects and appliances instead of buying new ones. The proposal represents an incentive to reduce the use of resources while cutting CO2 emissions.

incentivi a chi ripara
Riparare gli oggetti e i piccoli elettrodomestici: in Svezia ci saranno degli incentivi. Foto Paul Hunter/Toronto Star via Getty Images

Sweden will slash taxes

The Value-added Tax (VAT) rate will be reduced from 25 per cent to 12 per cent on repairs to bicycles, shoes, and clothes. This plan has been proposed in September and if voted could enter into force as of January 2017. Fixing appliances will be rewarded with tax breaks, saving 10 per cent on repairs.

“We believe that this could substantially lower the cost and so make it more rational economic behaviour to repair your goods,” said Per Bolund, Sweden’s minister for financial markets and consumer affairs. In 2015, at least 85,000 tonnes of fridges, refrigerators and other appliances have been recovered according to data provided by Sweden’s government. The new incentives aim at reducing the number of appliances that end up in landfills.

incentivi a chi ripara
Photo by Spencer Platt/Getty Image

Rewarding repairs is the founding principle of the circular economy

Circular economy systems keep the added value in products for as long as possible and eliminate waste. They keep resources within the economy when a product has reached the end of its life, so that they can be productively used again and again and hence create further value,” reads a communication of the European Union.

The high-tech industry will benefit significantly. “The hi-tech industry monopolises a share in the global production of metals for 7 million tonnes yearly – amounting to over 77 billion dollars – it is clear that the recovery of renewable materials to be employed again in the productive cycle is fundamental to shift towards a more sustainable industry,” according to the Ellen MacArthur Foundation.

“I believe there is a shift in view in Sweden at the moment,” added Bolund. “There is an increased knowledge that we need to make our things last longer in order to reduce materials’ consumption”. Circular economy offers a great opportunity for reducing materials costs by 340-380 billion dollars yearly.

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