Swedish Think Tank Urges Government To Cut Tax

by Ulrika Lomas, Tax-News.com, Brussels

27 January 2005

Leading Swedish economic and social policy think tank, the Centre for Business and Policy Studies (SNS), has called on Sweden’s government to lower the nation’s tax burden by reducing taxes on wealth, labour and shares.

At 50.6% of gross domestic product, according to the latest available figures, Swedish taxes are already the highest in the European Union and in a report released this week, SNS warned that upward pressure on expenditure may push Swedish taxes even higher.

"The risk at present is that taxes, particularly on labour, will continue to rise. Pressure for higher public expenditure as a result of demographic trends, not least, may force higher tax levels," the report stated.

SNS noted that Sweden’s tax system currently has a top marginal rate of 57%, and urged a reduction in income tax to 20% from 25% for the highest earners, along with the phasing out of wealth tax, the elimination of double taxation on share dividends and a review of capital taxes.

"Capital taxation needs to be looked over in several areas so as to make it more uniform and hence promote a more efficient allocation of savings and stimulate investment," the report noted.

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