Swedish finance minister dubious about proposed financial-services tax: TT News Agency

STOCKHOLM (Reuters) – The Swedish government may not introduce in its current form a heavily criticized proposal for a tax on financial services because it would hit too many companies, the country’s finance minister told a local news agency on Tuesday.

Sweden’s center-left minority government has long sought to impose a financial-services tax, saying the services – which are exempt from value-added tax – should pay more to the state.

A government-appointed commission in November proposed a 15 percent payroll tax for financial services, which it said would raise as much as 7 billion Swedish crowns ($795 million) a year. Critics say it would hit too many companies and push jobs overseas.

“Given it’s so broad, it is doubtful if it fulfils its purpose,” Finance Minister Magdalena Andersson told news agency TT. “We campaigned on a bank tax, but this is something else.”

Earlier on Tuesday, the Tax Authority rejected the proposal and said it would hit over 300,000 companies, far more than the 10,000 or so registered financial firms, and would affect many companies not under-taxed.

Under the proposal, all companies that have revenues from financial services would be subject to the tax, including retail companies such as car dealerships offering payment plans.

The competition watchdog rejected the proposal and the central bank has also questioned it.

It has also drawn criticism from financial services themselves, who say it could force Nordea, Handelsbanken, Swedbank, SEB and other banks to move more jobs abroad.

The proposal, which has yet to be turned into a government bill, is going through a three-month consultation ending this week and will be evaluated before taking a decision on whether to press ahead or change the proposal.

“We want the banks to contribute more, one way or another,” Andersson said.

The plan has faced criticism from center-right opposition parties, but the government can attach it to the budget bill, which means it would probably pass in parliament.