Sweden Offers Tax Breaks For Citizens Who Repair Their Stuff Instead Of Trashing It

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If you wear your jeans a lot, eventually they’ll start to get a hole. What do you do? You throw them away and buy a new pair, of course. Everybody knows that.

Sweden is introducing tax breaks on repairs to items like fridges and bicycles in an effort to combat waste — and perhaps boost the country's economy at the same time.

The idea is to fight throwaway consumer culture by making it more affordable to repair goods, rather than ditching broken for brand-new.

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Sweden’s ruling Social Democrat and Green party coalition is set to submit proposals to Parliament 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 of repairs to appliances such as fridges, ovens, dishwashers and washing machines.

“We believe that this could substantially lower the cost and so make it more rational economic behavior to repair your goods,” said Per Bolund, Sweden’s minister for financial markets and consumer affairs and one of six Green party cabinet members.

“We believe that this could substantially lower the cost and so make it more rational economic behavior to repair your goods,” said Per Bolund, Sweden’s Minister for Financial Markets and Consumer Affairs and one of six Green party cabinet members.

As for white goods — items like fridges, freezers, and washing machines — consumers can now claim income tax on repairmen who fix those products. That could reduce the cost of a repair by 87 percent, the Guardian reported.

"I think it will be a good incentive and I think there's also a possibility that people will buy high-quality products and repair them, rather than buying cheap products they know will break down and then buy something new instead,"  Per Bolund, told BBC News.

The Minister — who pushed strongly for the new incentives — said the VAT decrease will cost the Swedish government about $250 million Krona, or just over $37 million.

However, Bolund told the Guardian that a new levy on harmful chemicals found in white goods should balance that out.

He also hopes that the lower repair costs will spur the economy.

Bolund estimates that the VAT cut will reduce the cost of a repair worth 400 SEK ($45) by about 50 SEK ($6), enough to stimulate the repair industry in Sweden.

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. Bolund said the policy 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 Swedish government is hopeful that these tax incentives will jump start a home repairs industry in Sweden, in turn creating jobs for the country’s low-skilled immigrants.

In theory, encouraging Swedes not to buy foreign-made products as replacements for things they already own would also reduce carbon emissions.

Buying is often cheaper than repairing in developed countries, partly because the labor to produce imports from developing countries is cheaper than the labor involved in a local repair. Also, to fuel consumption, many products are now designed not to last. Manufacturers of complex gadgets have profited from channeling consumers into manufacturer-certified repair shops, by keeping repair information proprietary.

"I believe there is a shift in view in Sweden at the moment. There is an increased knowledge that we need to make our things last longer in order to reduce materials’ consumption,” Bolund said.

Sweden is already a champion for waste management

Sweden already keeps 99 percent of its household waste out of landfills through recycling or incinerating what can't be reused. The country's waste-to-energy program converts over half of the country's garbage into electricity. 

In fact, the practice is so efficient that the country has had to import waste from countries like the United Kingdom, Norway, and Italy to keep things going.

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