Danish Coalition Government Disagrees Over Tax Relief

by Ulrika Lomas, Tax-News.com, Brussels

10 June 2002

According to a report in the Copenhagen Post last week, government coalition partners, the Conservative Party and the Liberal Party remained locked in disagreement over tax relief as the summer recess began.

The newspaper reported that although Prime Minister, Anders Fogh Rasmussen is adamant that tax relief for the country's workers will come only after the funds have been found from elsewhere in the budget, Conservatives are arguing that taxpayers will be willing to work harder if rewarded with tax relief, and that extra income would be generated as a result.

Spokesman for the Social Democratic Party, Mogens Lykketoft also weighed into the fray according to the Copenhagen Post report, slamming the Liberal Party's tax freeze promise as a hindrance to monetary policy. This echoes recent observations made by the country's independent economic council, which warned in May that the policy is 'inappropriate', and is 'preventing the government from stabilising the economy by adjusting the tax burden'.

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