According to Abba: The Official Photo Book, published to mark 40 years since they won Eurovision with Waterloo, the band’s style was influenced in part by laws that allowed the cost of outfits to be deducted against tax – so long as the costumes were so outrageous they could not possibly be worn on the street.
I think it was even better than that. It wasn’t just the tax on the costume, it was the entire cost of them could be deducted from their tax bill. The more extravagant and expensive, the smaller that years tax bill!
There you go. Thanks for the explanation!