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Back to National Funding of Road Infrastructure

Sweden finances its highways through municipal and state taxes.  The state receives revenue from the taxation of motor vehicles and fuels, and from congestion fees in the two largest cities.  There are two international toll bridges and plans to make part of Sweden’s largest divided highway toll-based.  Planning for major infrastructure projects is undertaken by the municipalities and the national government. The current national infrastructure plan covers 2014 to 2025.

I. State and Municipal Road Infrastructure Projects

Ownership and responsibility for road infrastructure in Sweden is divided between the state, municipalities, and individuals.  Individuals have responsibility for their private roads whereas the state and municipalities have responsibility for public roads.  Swedish highways (i.e., divided highways) are all state owned.  Because of the division of power between the state and the municipalities, road infrastructure projects are determined collaboratively between state and municipal agencies.[1]

All road construction must be undertaken pursuant to a road plan, which is jointly drafted by Länsstyrelsen (the County Administrative Board), the affected municipalities, and those individuals directly affected by the construction.[2]  When the plan affects public transportation, relevant agencies need to be heard as well.  In addition to describing the project and its geographic scope, the plan must include a discussion of the proposed project’s effects on the environment.[3]

Although municipalities have a responsibility to their own taxpayers, it is possible for a municipality to contribute to the financing of public roads in neighboring municipalities where doing so benefits the municipality, or to the financing of roads owned by the state.  However, the contribution cannot be the greater part of the financing.[4]  One example of when a municipality might want to invest in neighboring infrastructure is when the municipality attracts a large number of workers (commuters) from the neighboring municipality.[5]

Trafikverket (the Swedish Transportation Administration) is the government agency responsible for state-owned roads.  Most highways are state owned.  There is no private funding of highways in Sweden; all funding comes from state or municipality coffers, although there are toll bridges (see discussion, Part III, below).

Sweden has developed a National Road Plan for 2014–2025.[6]  The Plan allocates a total of SEK 522 billion (approx. US$80 billion) of national budget.[7]

To date Sweden has 98,500 kilometers of state-owned roads and 4,600 kilometer of roads owned by municipalities,[8] in addition to private roads.[9]

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II. Taxation of Motor Vehicles

Sweden uses annual taxation of motor vehicles to pay for the costs associated with traffic, i.e. increases in CO2 emissions, wear and tear on road infrastructure, and other state expenses.[10]

The rate of taxation of motor vehicles is dependent on the model year of the car and the amount of CO2 emissions generated.[11]  Cars manufactured from 2007 to the present are taxed under the Vägtrafikskattelag (Road Traffic Tax Act).[12]  Older cars are taxed at a higher rate under the lag med särskilda bestämmelser om fordonsskatt (Law on Special Provisions Regarding Vehicle Taxation).[13]

For cars manufactured in or after 2007, the tax amount is calculated by multiplying the amount of CO2 emitted per kilometer during mixed driving.[14]  The emission is calculated in grams (above the 117 g threshold) then multiplied by 20 Swedish kronor (SEK) (approx. US$3.08) per gram of CO2.[15]  The tax is thus based on the gas/mileage emission of CO2.  In addition, a second amount is added onto this calculation if the car uses diesel fuel,[16] effectively at least doubling the tax.[17]

The Swedish government encourages its citizens to purchase or upgrade to newer cars by exempting certain new cars from the vehicle tax for the first five years of a car’s life.[18]

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III.   Fee-Based Financing

Sweden currently has no fee-based system for driving on larger state highways.  The state does, however, collect taxes for motor vehicle congestion in Stockholm[19] and Gothenburg,[20] and collects tolls for the use of two international bridges.

A. Congestion Tax

Sweden has adopted the use of a “congestion tax,” which is paid more or less as a toll for entering and exiting major cities with a motor vehicle.[21]  The tax is paid to the state.[22]  Depending on what time of day one enters the city of Stockholm, the tax ranges from SEK 10 to SEK 20 (approx. US$1.54 to 3.08).[23]  The government bill proposing the congestion tax said that it was generally being undertaken to either finance infrastructure changes or to influence how the flow of traffic is directed.[24]  The tax is meant to shift the preferred means of transportation from cars to public transportation.[25]  It is not meant to generate funding to maintain streets but rather to deter the use of cars during certain hours of the day and to pay for the environmental effects of pollution caused by cars.[26]  Payment of the tax is made by the individual who is registered as the owner of the car.

There are no physical toll booths for payment of the congestion tax; instead, the license plates of motor vehicles are registered when passing and the owner is then billed monthly by Transportstyrelsen (the Swedish Transport Agency).[27]  A missed payment results in an added fee of SEK 500 (approx. US$77).[28]

Sweden first considered implementing a congestion tax in 1989 when a government bill was introduced that would have allowed municipalities to tax entry into their cities after receiving approval from the government.[29]  Several government reports and bills were presented without ever resulting in a congestion tax until such a tax was implemented in Stockholm on August 1, 2007.[30]

 

B. International Toll Bridges

Sweden collects a toll for passage over two international bridges, Öresundsbron (which connects Sweden to Denmark) and Svinesundsförbindelsen (which connects Sweden and Norway).[31]  These fees are meant to cover the cost of building and maintaining the bridges.  On both bridges the fees are collected through physical and electronic toll stations.  At Öresundsbron, Sweden and Denmark divide the toll revenues 50/50.[32]  At Svinesundsförbindelsen, Sweden collects tolls from vehicles entering Norway.[33]  Motorcycles and mopeds, ambulances, fire trucks, and public buses are exempted from the toll.[34]  As of January 2, 2014, it cost SEK 21 (approx. US$3.23) for a car to pass into Norway and SEK 105 (approx. US$16.16) for a truck.[35]  Payments made electronically through a form of “easy pass” receive a 13% reduction in the amount of the toll.[36]

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IV. Tax on Energy

Sweden taxes oil, petroleum, diesel, etc. in accordance with the Tax on Energy Act.[37]  Currently, the tax on petroleum is SEK 5.63 per liter (approx. US$3.11/gallon) and constitutes a subset of the environmental tax, which will increase to SEK 5.85 in 2015.[38]  The total national tax is made up of a two-part tax: an energy tax and a CO2 tax.[39]  Diesel is taxed at the considerably lower rate of SEK 4.85 (approx. US$0.75) per cubic meter. 

In addition, a state value-added tax (VAT) of 25% is added to gasoline and diesel sold to consumers, making the end price of a liter of gasoline SEK14.58 (approx. US$2.24) in 2008 when the actual cost of gasoline prior to taxation was approximately SEK 5 (approx. US$0.77).[40] 

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V. Future Sources of Financing for Infrastructure Projects

A. E20

Public opinion strongly favors making the two-way highway E20 into a highway without two-way traffic.  Such a change would have to be financed partly by the municipalities in the region, as the state has found that the region does not meet the requirements for it to pay the costs of expanding it to a highway with two lanes in each direction (separated by a barrier).[41]  Municipal opposition and the state have instead opted for a 2-1 lane option where the highway has a barrier in the middle and alternates one or two lanes in each direction.[42]

B.  Förbifart Stockholm

A much debated project, Förbifart Stockholm, that will allow traffic to circumvent Stockholm while traveling on the E4an (a major Swedish highway) may become the first toll road in Sweden, as once built it will be largely financed through user tolls (80%) with the remaining funds coming from the state.[43]

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VI. Future Legislation

On December 16, 2013, the government published Fossilfrihet på väg (Fossil Free on the Road),[44] a report discussing several possible changes to the current calculation of motor vehicle taxes and a possible increase in taxation on diesel of SEK 0.77 (approx. US$0.11) per liter.[45]  The report also proposes a new congestion tax on heavy-duty vehicles based on the kilometers driven.[46]

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Elin Hofverberg
Foreign Law Research Consultant
March 2014

 


[1] 11 § Väglag (Svensk Författningssamling [SFS] 1971:948), http://www.notisum.se/rnp/sls/lag/19710948.htm.  If these agencies cannot agree then the issue is sent to the government for review.

[2] Id § 14b.

[3] Id.

[4] Alf Bohlin, Kommunalrättens grunder 136–37 (6th ed. 2011).

[5] Id.

[7] Gunnar Malm, generaldirectör, Trafikverket, Nationell transportplan 2014–2025 (June 14, 2013), http://www.trafikverket.se/PageFiles/129095/presentation_14_juni_forslag_nationell_transportplan.pdf.

[8] Sveriges vägnät, Trafikverket, http://www.trafikverket.se/Privat/Vagar-och-jarnvagar/Sveriges-vagnat/ (last updated Jan. 23, 2014).

[9] Id.

[10] See Statens Offentliga Utredningar [SOU] 2004:63 Skatt på väg, at 221, http://www.regeringen.se/sb/d/108/a/24111 (government report series).

[11] Proposition [Prop.] 2005/06:65 Ny trafikskattelag m.m. at 70, http://www.regeringen.se/sb/d/5019/a/55391 (government bill). 

[13] Lag med särskilda bestämmelser om fordonsskatt (SFS 2006:228), http://www.notisum.se/rnp/sls/lag/ 20060228.htm.

[14] 2 ch. 9 § Vägtrafikskattelag.

[15] Id.

[16] Id. 10 §.

[17] See id.

[18] 11 § Vägskattelagen.  For a historical background on the motor vehicle tax, which was previously only based on a car’s weight, see Prop. 2005/06:65 Ny vägtrafikskattelag, m.m. at 64, http://www.regeringen.se/sb/d/ 5019/a/55391.

[19] Trängselskatt i Stockholm, Transportstyrelsen, http://www.transportstyrelsen.se/Vag/Trangselskatt/ Trangselskatt-i-stockholm/ (last modified Jan. 8, 2014).

[20] Trängselskatt i Göteborg, Transportstyrelsen, http://www.transportstyrelsen.se/sv/Vag/Trangselskatt/Trangselskatt-i-goteborg/ (last modified Jan. 8, 2014).

[22] Id. 1 §.  

[23] Trängselskatt i Stockholm, Transportstyrelsen, supra note 19.

[24] Prop. 2003/04:145, Trängselskattat 23.

[25] Id. at 35.

[26] Id.

[27] Trängselskatt i Stockholm, Transportstyrelsen, supra note 19.

[28] Id.

[29] Prop. 2003/04:145 at 24.

[30] Id. at 23–26.

[31] Id.

[32] Svinesundförbindelsen, Transportstyrelsen (May 5, 2010), http://www.transportstyrelsen.se/sv/Vag/ Fordon/Vagavgifter/Vagavgifter-i-Sverige/Svinesundsforbindelsen/ (last updated Dec. 10, 2013); Vägavgift vid Svinesund, Svinesunforbindelsen AS, http://www.svinesundsforbindelsen.no/svensk/svinesund.htm(last visited Feb. 7, 2014).

[33] 2 § Förordning om avgift för färd på Svinesundsförbindelsen (SFS 2005:531), http://www.riksdagen. se/sv/Dokument-Lagar/Lagar/Svenskforfattningssamling/Forordning-2005531-om-avgif_sfs-2005-531/.

[34] Id. 2 § st. 2.

[35] Id. 5 §.

[36] Id. 6 §.

[38] Id. ch. 2:1 §.

[39] Id.

[40] Så här byggs bensinpriset upp, Preem, http://www.preem.se/templates/page____791.aspx (last visited Jan. 17, 2014).

[42] Ulf Nyström, Regionstrid om utbyggnad på E20, GP (Apr. 10, 2012; updated Apr. 11, 2012), http://www.gp.se/nyheter/goteborg/1.911834-regionstrid-om-utbyggnad-pa-e20.

[43] Förbifart Stockholm, Trafikverket, http://www.trafikverket.se/forbifartstockholm(last updated Jan. 14, 2014). 

[44] SOU 2013:84 Fossilfritt på väg, http://www.regeringen.se/sb/d/17075/a/230739.

[45] Id. at 628.

[46] Id.; see also Vägavgifter i Sverige, Transportstyrelsen, http://www.transportstyrelsen.se/sv/Vag/Fordon/ Vagavgifter/Vagavgifter-i-Sverige/ (last modified May 5, 2010).