Sweden – Draft bill to reduce VAT rate on food

To help households with the cost of living and stimulate the economy, the Swedish government has published a draft bill including a temporary reduction of the VAT on food from 12% to 6% effective from 1st April 2026 until 31st December 2027.

The plan was already announced in September 2025 and was included in the government’s 2026 budget proposal presented later that month. The measure is intended to put more money into consumers’ wallets and support household finances.

Details of the VAT reduction

– Duration: The temporary cut is planned from 1st April 2026 to 31st December 2027.

– Affected products: The reduction applies to most food products, as well as bottled water. Excluded items include alcoholic beverages and tap water.

The proposal is a response to a high food prices and economic downturn in Sweden. The government hopes the reduction will boost household purchasing power, increase consumption, and contribute to economic recovery. The plan was introduced in the run-up to Sweden’s 2026 legislative elections and is a key part of the government’s expansive budget. While receiving support, it has also faced criticism, including from opposition parties, who have questioned whether the cut will truly benefit low-income households.