The amount of savings for an average Swedish family due to the reduction of food VAT by half.

Sweden's Deputy Prime Minister, Ebba Busch, has announced a significant VAT cut on food, aiming to provide relief to households across the country. The reduction in Value-Added Tax (VAT) will lower the tax on food from 21% to 12%, according to Busch's announcement.

The estimated annual savings for a two-child family due to this VAT cut is 6,500 kronor, while a retired couple could save 4,400 kronor. For a single parent and someone living alone, the savings are estimated to be 400 kronor and 200 kronor respectively, according to calculations by Swedbank.

Sweden's Prime Minister, Ulf Kristersson, has emphasised that Swedish retailers remain free to set their own prices. However, the government is taking steps to ensure that as much of the cost savings from the VAT cut is passed on to consumers. To achieve this, they plan to establish a Food Price Commission within the Swedish Consumer Agency.

The Food Price Commission's role includes overseeing the food industry to prevent price increases or margin expansions due to the VAT cut. According to Kristersson, the Commission will focus on retailers failing to pass through the VAT cut in a noticeable way. Ebba Busch warned that retail giants should not be allowed to keep the savings from the VAT reductions for themselves.

Olle Holmgren, the chief strategist for Sweden at the SEB bank, expects as much as 80 to 90 percent of the VAT cut to be passed on to consumers. If fully passed on, the VAT cut could make food on average 5.4 percent cheaper.

In 1996, when Sweden last cut VAT on food, the price of food in supermarkets fell by 7.4 percent, according to a 2018 study by the Swedish National Audit Office. The exact date of the 1996 VAT reduction law is not provided in the available search results.

The Food Price Commission is part of the Swedish Consumer Agency, as stated earlier in the article. Kristersson emphasised that the Commission will bring attention to any retailers failing to pass through the VAT cut.

Ebba Busch stated that the VAT reduction should be noticeable on the shelves in food shops. Swedbank's calculations suggest that the VAT cut could have a substantial impact on the monthly costs of various household sizes.

In conclusion, the VAT cut on food announced by Sweden's Deputy Prime Minister, Ebba Busch, aims to provide relief to households across the country. The Food Price Commission, part of the Swedish Consumer Agency, will ensure that retailers and wholesalers do not increase their margins due to the VAT cut, and that as much of the cost savings is passed on to consumers.