June 9, 2017 / 1:59 PM / 9 months ago

Danish government seeks income tax cuts to counter overheating - Finance Minister

COPENHAGEN (Reuters) - Denmark should cut taxes to encourage people to work more, which would increase the supply of labour and help prevent the economy from overheating in 2018, Finance Minister Kristian Jensen said on Friday.

“We can already now see increasing problems for the enterprises to hire the right people and to cope with the increasing demand for their products,” Jensen said at a meeting with the Danish parliament’s finance committee.

“This will intensify with bottlenecks for skilled workers. I see a risk for overheating of the economy in the course of 2018, unless we do something about it,” he added.

After the summer break the government will put forward a plan to cut income tax, which should take effect already from 2018, and to lower taxation on pension savings.

The aim is to make Danes work more hours and also postpone retirement, Jensen said.

The centre-right government only holds 53 seats in parliament and has to negotiate with other parties, most often populist ally the Danish People’s Party, to secure the 90 votes necessary to pass new laws.

Reporting by Erik Matzen, editing by Teis Jensen and Terje Solsvik

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