Carina Raa
Senior Lawyer
Oslo
Newsletter
The Norwegian government proposes experimental youth tax deduction program
by Carina Raa and Morten Platou
Published:
On 27 May 2025, the Norwegian government proposed an experimental tax program. The program will randomly select 100,000 young people aged 20-35 to receive a trial work deduction (Nw. arbeidsfradrag) of up to NOK 125,000, potentially reducing their annual tax burden by up to NOK 27,500. The trial is proposed to run for 3-5 years to evaluate effectiveness.
The government aims to increase employment and reduce welfare dependency, particularly targeting young people receiving disability benefits or work assessment allowances. This work deduction would introduce a new element to Norway's tax system by providing a deduction that applies only to employment income – not welfare benefits – making work financially more attractive than social assistance.
This trial represents an unprecedented use of random selection methodology in Norwegian tax policy. The government acknowledges that such experimental approaches have not previously been used in tax policy, having only been applied in health, employment, and education sectors.
The program raises several significant concerns for taxpayers and tax policy. First, the random selection creates fundamental fairness issues, as similarly situated individuals will face different tax burdens based purely on chance. Second, the proposal lacks essential implementation details, with the government seeking public input in the consultation period on basic design elements including the exact deduction amount, target demographics, and program scope.
The consultation period ends 1 August 2025.
