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The Swedish government has taken a couple of tax-related measures to encourage a repair society, in line with the idea of the circular economy.

Lower VAT rate for repairs

Under the first measure, repairs only need apply a lower rate of VAT – 12% instead of 25%. A wide range of activities benefit from this including the repair of household appliances like dishwashers, washing machines, fridges, freezers, cookers and so on; as well as personal items including bicycles, clothes, leather goods, household textiles and shoes.

Income tax break for consumers for half the cost of labour repairs

The second measure is that individuals can claim back half of the labour cost for repairs carried out to their own goods from their income tax.

The two measures are in effect since January 2017.

The Swedish government also hopes the measure will boost the economy as well as encouraging people to buy high quality goods in the first place that can be repaired.

This is something that the Irish government could consider to encourage local repair businesses and jobs, encourage the purchase of high quality goods in the first place, in addition to implementing an innovative measure under the circular economy.