The Paradise Papers leak has stirred up the Swedish business world. Chair of the Confederation of Swedish Enterprise Leif Östling is one of those who placed funds in the tax havens of Malta and Luxembourg, and has defended his actions. He says he has paid SEK 84 million in income tax and SEK 23 million in capital gains tax in Sweden, plus SEK 70 million in Germany and claims he is following rules with his funds in Malta and Luxembourg.
Now there are calls from within the business sector for Östling to resign. One source from within the confederation says there is a risk that businesses will leave the organisation. Maria Mattsson Mähl, CEO of Alpha CE and recently nominated to the confederation’s board believes Östling’s comments damage the organisation. “Most members are working hard to pay taxes and make ends meet,” she says.
However among one of the organisation’s heavyweight representatives, support is intact. “He is speaking as a private person, so our confidence in Leif is unchanged,” says Klas Wåhlberg, CEO for the Association of Swedish Engineering Industries.
The government has been generous with the budget because of the coming election, according to chair of the Confederation of Swedish Enterprise (Svenskt Näringsliv), Leif Östling, who calls it “a typical Social Democrat election budget”.
Collector Bank’s chair Lena Apler agrees, “You can tell we are approaching an election year They are flirting with families and pensioners.” Meanwhile Rune Andersson, chair of Mellby Gård predicts the economy will overheat and wants to see more austerity.
Leif Östling is not impressed with the budget from a business perspective either. “The business world is getting quite a large number of tax increases over the year.” Former chair of Svenskt Näringsliv Jens Spendrup points out that there needs to be more new business in the country because that is where new jobs are created.
Leif Östling wants a review of the tax system for wage earners, pointing out that it makes it difficult for Swedish companies to recruit from abroad.
CEO and chair of the Confederation of Swedish Enterprise, Carola Lemne and Leif Östling, write in DI today that 460,000 jobs must be created in the next few years if Sweden is to meet the government’s target of having the EU’s lowest unemployment by 2020. They write, “For various reasons, such as age, “education first and job later” is not the right solution for everyone. The alternative to several more years at a school desk cannot be being consigned to benefit dependency. There must be more paths to jobs.”
They highlight reform proposals such as creating introductory jobs for immigrants, increasing flexibility in SFI (Swedish language courses), developing job matching, extend RUT and ROT deductions, making it possible for asylum seekers to work, redistributing resources to vocational courses and opening up the Public Employment Agency to competition.
“If 100,000 more new jobs are to be created and contribute to Sweden’s growth more efforts are needed than what the government has so far demonstrated”.
On Thursday the EU Tax Commissioner Pierre Moscovici presented the European Commission’s proposals to clamp down on tax fraud and corporate tax avoidance schemes, which he estimated costs the EU upwards of SKr 650 billion (70 million euros) per year.
Sweden’s Finance Minister Magdalena Andersson welcomes the proposal, while Krister Andersson, the Confederation of Swedish Enterprise’s tax policy chief, says the proposal goes too far, and warns that the proposals will entail higher tax for Swedish companies at the same time as tax revenue for the state will decrease.
“Swedish firms risk paying more since Sweden has a lower corporation tax than Germany, France and India. At the same time Swedish tax revenue will fall,” he warns.
The Swedish Federation of Business Owners (Företagarna) declares that the terror attacks in Paris may lead to a more closed Europe. “This kind of senseless attack aims to alarm open democracy and the free market,” says Günther Mårder, CEO of Företagarna.
CEO of the Confederation of Swedish Enterprise (Svenskt Näringsliv) also fears that if borders become closed that trade between countries will suffer. “When people are free to move across borders this creates welfare,” says Jens Spendrup.
All of 94% of Swedish taxpayers think they pay lower taxes than they actually do, finds a new report “Underestimated taxes” by the Confederation of Swedish Enterprise (Svenskt Näringsliv) and TNS Sifo.
Swedish taxpayers think they pay around 34% of their income in tax revenue, but in fact they pay on average 52%. The misconception is largely due to the many indirect taxes, of which payroll charges constitutes the biggest one, states the report.