NORWAY: Details Of 2026 Budget Proposal Include Income and Electricity Tax Cuts

Full details of Norway’s 2026 budget proposal have been released. A reminder that the Government will spend 2.8% of total pension fund assets next year, which was in line with analyst and Norges Bank expectations. This is estimated to provide a broadly neutral fiscal impulse of 0.1pp towards mainland GDP next year.

Summary of some of the proposed polices (many of which were as expected).

• “The Government proposes to reduce income tax by more than NOK 4 billion by, among other things, increasing the personal allowance and reducing National Insurance on wages, benefits and business income.”
• “In total, the Government proposes to allocate NOK 11.5 billion to Norway’s Price electricity support scheme and the household electricity subsidy programme. Further, we propose to reduce electrical power tax by NOK 4 billion.”
• This was already known: “The Government proposes that families should pay a maximum fee of NOK 1,200 per month for a kindergarten spot”
• “Norway will in 2026 also provide military and civilian support to Ukraine through the Nansen programme. The Government proposes a total of NOK 85 billion in 2026 – the same as in 2025.”
• “The Government proposes to increase the defence budget in line with the long-term plan for the defence sector. This entails NOK 4.2 billion in increased funding. In total, it is estimated that defence expenditure will amount to 3.4 per cent of the gross national product (GDP) in 2026. “
• “The Government proposes to increase carbon taxes by 14 per cent in 2026 in line with the plan to increase the general level to NOK 2,400 per tonne of CO2 in 2030 (measured in 2025 prices). “