Tax relief for low-to-middle earners
The government yesterday presented a tax relief proposal for next year, primarily aimed at low-to-middle earners.
As an example, finance minister Ruth Vang mentioned that the average pedagogue can expect to pay DKK 13,000 less per year in income tax, according to news portal dimma.fo.
Tax cuts will be less generous for high-income earners, with those earning above DKK 65,000 per month seeing only modest tax savings.
On average, a Faroese household with two incomes earns about DKK 800,000 per year. If the proposal is passed, such households would get a monthly tax cut of DKK 1,500.
Vang added that the tax relief would be fully financed for 2023 and 2024, partly by increasing taxes on petrol, diesel and heating oil.
This increase in fuel taxes will cost the average household about DKK 200 per month, leaving DKK 1,300 in monthly tax savings.
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In addition to financing the tax relief, the objective of raising fuel taxes is to encourage a transition to renewable energy sources.
The new package will also be financed by higher taxes on fisheries.
Low-income earners will pay significantly less in government tax.
Those who earn less than DKK 275,000 per year are eligible to apply for a DKK 5,000 fuel allowance regardless of whether they use fossil fuels or renewable energy sources.
Read the Faroese version of this article here.
English version by prosa.fo.
More Faroese News in English.