Waste not want not: Sweden to give tax breaks for repairs

by Michael Smith (Veshengro)

RepairThe Swedish government attempts to tackle the “throwaway culture” by cutting VAT on fixing everything from bicycles to washing machines

The Swedish government is introducing tax breaks on repairs to everything from bicycles to washing machines so it will no longer make sense to throw out old or broken items and buy new ones.

Sweden's ruling Social Democrat and Green party coalition is set to submit proposals to parliament on Tuesday to slash the VAT rate on repairs to bicycles, clothes and shoes from 25% to 12%.

It will also submit a proposal that would allow people to claim back from income tax half of the labor cost on repairs to appliances such as fridges, ovens, dishwashers and washing machines.

It is hoped by the Swedish government that the tax break on appliances will spur the creation of a new home-repairs service industry, providing much-needed jobs for new immigrants who lack formal education.

The incentives are part of a shift in government focus from reducing carbon emissions produced domestically to reducing emissions tied to goods produced elsewhere.

Sweden has cut its annual emissions of carbon dioxide by 23% since 1990 and already generates more than half of its electricity from renewable sources. But emissions linked to consumption have stubbornly risen.

The policy, according to the government, is also tied in with international trends around reduced consumption and crafts, such as the “maker movement” and the sharing economy, both of which have strong followings in Sweden.

The proposals will be presented in parliament as part of the Swedish government's budget proposals and if voted through in December will become law from 1 January 2017.

We can but hope that there are also the businesses in place that can offer those repair services, for in many countries now, due to the fact that repair is more expensive than buying new, more often than not, such businesses are now few and far between, if they exist at all.

And when it comes to, say shoe and boot repair, those little shops often have, for instance, no idea of how to resew leather upper to a leather midsole. “I do not have a machine that can do that”, I have been told by three proprietors of such shops. While they may be able to sew an ordinary seam on a boot or shoe with a machine, they cannot sew anything by hand, as would be required sewing upper back to midsole. We are beginning to lack the skills now of doing such things.

On the other hand such incentives, as proposed by the Swedish ruling parties, could actually revitalize the once thriving repair economy. And we would do well to replicate something along those lines also in other countries. There was a time when repair was the norm and order of the day and there were repair shops for all manner of goods almost everywhere. They were part of the economy.

© 2016