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Lowered VAT in the restaurant and catering industry

Country of implementation
Sweden
General short description of the innovation
In 2012 a tax-reduction in VAT in the restaurant and catering industry was implemented, the aim was to increase profits in the undustry, thereby freeing up economic resources to expand businesses and employ more people. Since estimates of around 35% of all employed personal in this sector are under the age of 25 this measure was intended to increase occupation-rate among this target group.
Target group
Youth
Policy Field
  • general fiscal
Type of Policy
    Duration of the policy
    Starting year 2012
    Scope of innovation
    • Scope: Structural: Most likely intended structural. The measure is motivated as a means of increasing the permanent occupancy rate among young people where unemployment rates are high, this is described partially as a matter of structural unemployment where a lareg portion of the problem is the lack of unqualified positions for young people, rather than as an emergency response to an acute crisis situation.
    • Budgets: temporary/structural: Most likely intended structural. The measure is motivated as a means of increasing the permanent occupancy rate among young people where unemployment rates are high, this is described partially as a matter of structural unemployment where a lareg portion of the problem is the lack of unqualified positions for young people, rather than as an emergency response to an acute crisis situation.
    • Number of intended beneficiaries: temporary/structural: Most likely intended structural. The measure is motivated as a means of increasing the permanent occupancy rate among young people where unemployment rates are high, this is described partially as a matter of structural unemployment where a lareg portion of the problem is the lack of unqualified positions for young people, rather than as an emergency response to an acute crisis situation.
    • Spatial coverage: national
    General description of (intended) objectives and strategies
    The measure is motivated as a means of increasing the occupancy rate among young people where unemployment rates are high, this is described as a consequence of demographic changes with an increasing share of young people in the labour force
    Nature of the innovation-short-term perspective
    Difficult to say due to the measure only having run for 2 years
    Nature of the innovation-long-term perspective
    Difficult to say due to the measure only having run for 2 years
    Type of innovation
    • retrenchment or expansion of an existing/earlier policy
    New outputs
    • subsidies/tax-credits (Reduction of existing VAT in the restaurant/catering secto)
    Intended target group
    Young people primarily, but also immigrants
    Working age population
    • educational level (low/medium/high) (people qualifying mainly for low skilled work)
    • employment situation (unemployed, difficulty getting a foot hold on the labor market)
    Actors involved in policy-making/implementation and/or evaluation
    • central state
    Clarification of the role of various actors
    New or reformed policies of this type requiring changes in legislation always go out on referral before being decided upon and implemented. Such referral instances usually include municipalities, social partners, evaluative public authorities and relevant interest organizations
    Intended output
    • subsidies/tax-credits
    Did the innovation have any outcome related to job quantity?
    has not yet yielded any signifiant increase in labor demand for these groups.
    Clarification of outcomes in terms of impacting resilience and labour market inclusion
    no significant effects for the intended group(s).
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