Oct 02, 2019

Danish Government Presents 2020 Budget Proposal

On October 2, Finance Minister Nicolai Wammen presented the key elements in the government’s 2020 budget proposal, which focuses particularly on significant investments in welfare services, the police and strengthening the tax authorities.

The government proposes that the increased public spending is financed by leveraging the budgetary latitude, cancelling planned tax cuts and calling off the establishment of the refugee exit center on Lindholm.

A few key points of the 2020 budget proposals are:

  • The government will invest DKK 5.4 bn. in welfare and education
  • Financial means are allocated to hire 1000 nurses by 2021 (DKK 300 mio. in 2020)
  • Establishing grants for poor families with children (DKK 500 mio.)
  • DKK 700 mio. are allocated to roll back the reprioritization contributions for the education sector
  • The government plans to strengthen the police by allocating DKK 1.2 bn.
  • Earmarking DKK 1.5 bn. towards rebuilding the tax authorities. This includes DKK 150 mio. aimed at building a new tax control center with 250 employees working to fight tax havens and ‘aggressive tax planning’
  • The government allocates DKK 1 bn. to green research
  • DKK 2.1 bn. will serve as a reserve earmarked to e.g. welfare securing more staff in kindergartens
  • HRH Queen Margrethe II is allocated DKK 87.6 mio. in 2020. The remaining Royal family is allocated DKK 29.8 mio.

Proposed Financing of the Budget

  • Rolling back the relaxation of the inheritance and gift tax (DKK 1 bn.)
  • Uphold the tax fee on employer-paid phones (DKK 560 mio.)
  • Uphold the upper limit on stock share accounts (DKK 60 mio.)
  • Increase the tobacco tax with DKK 10 per cigarette pack over the course of two years (DKK 350 mio.)
  • In the future, companies are required to pay the first 40 days of an employee’s long-term sick leave (currently 30 days). This will generate DKK 215 mio. in 2020 and is expected to generate almost half a billion by 2021
  • Increase the taxation on plastic bags (DKK 195 mio.)
  • The government will draw out DKK 2.3 bn. from the budgetary latitude (økonomisk råderum)

Sources: Ministry of Finance, Altinget.dk, Ritzau