Danish Government Will Cut Tax on Cheapest Cars to 85% From 105%

Denmark will lower the tax rate on the cheapest cars to 85 percent from 105 percent in a move that will cost the government about 600 million kroner ($100 million) next year.

The cheap-car category will also be expanded to include vehicles costing up to 185,000 kroner compared with the current cap of 106,600 kroner, the country’s finance ministry said in a statement late Thursday.

The tax on more expensive cars, costing above 185,000 kroner, will remain at 150 percent, according to the proposal, which has the backing of the Danish People’s Party, the government’s main ally in parliament.

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