Concerns raised over tax proposal

Earlier this year a government-commissioned inquiry proposed that real estate sales in so-called packaging companies should no longer be tax exempt. The CEOs of Swedish property companies, who were asked to comment the proposals, have now submitted their findings to the Ministry of Finance and the general consensus is that a tax hike of some SEK 17 billion on the sector would curb construction, create financial unrest and cause rents to soar.

Plans to scrap tax on advertising in periodicals

On 1 January 2017 the government cut the tax on advertising in periodicals from 3 to 2.5%, costing the Treasury some SEK 20 million annually. It now plans to scrap the tax entirely as of 1 January 2018.

The cut will apply to daily newspapers and other publications that are issued at least four times a year. The move is expected to cost the Treasury a further SEK 15 billion.

Finance Minister Magdalena Andersson motivates the abolishment of the tax, saying a free and independent press is a vital component in a healthy, democratic society and stresses the importance of an independent press in this age of fake news.

Ryanair CEO opposes plans

Sweden’s Green Party has long advocated a tax on airline tickets, suggesting a levy of SKr 110 for short-haul EU flights, and of SKr 270 for long-haul flights. The Social Democrats have been indifferent to the idea, but the government has in any case appointed a commission of inquiry, which in the autumn will suggest how to design such a tax.

Ryanair’s CEO Michael O’Leary has slammed the plans, which he describes as crazy. He says airline passengers will abandon Sweden as a tourist destination, if the Greens’ plans are realised: “You have good football teams and beautiful women, but otherwise there is no reason to come to Sweden,” he remarks.

Social Democrats prepared to cut tax

Energy Minister Ibrahim Baylan says the government will do what is needed to ensure Sweden’s remaining six reactors do not close ahead of time, while Prime Minister Stefan Löfven tells Dagens Industri “we are facing a new reality”.

The business daily writes that the Social Democrats are prepared to cut tax on nuclear power capacity, which was raised only last year. There is every indication that the Green Party, the Social Democrats’ coalition partner, will accept such a cut, even though it goes against party policy. The explanation is that the Greens already see themselves as the victors, following the decision to close four reactors early. Furthermore, all talk of building new reactors to replace old ones has died out.

Fortum CEO slams subsidies

Like his colleagues at Vattenfall and E.ON, Fortum CEO Pekka Lundmark is highly critical of Sweden’s tax on nuclear power production, and expresses surprise over Swedish politicians’ lack of foresight. “The public sector is in need of tax income, but if you just keep raising taxes until you force the closure of your source of income, then you will have no tax income at all,” he says.

Lundmark believes that if the world is to be saved from greenhouse gases then it has to be done via market mechanisms. He would like to see a hike on carbon taxes and the scrapping of subsidies.