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Reinfeldt says no to alcohol tax cuts

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16:29 CET+01:00
Prime Minister Fredrik Reinfeldt has given the thumbs down to a proposal put forward by members of his own party to reduce taxes on wine and beer.

A number of Moderate Party members of the government's taxation committee had called for taxes on beer to be reduced as a means of tackling the illegal import of beer and spirits for sale on the Swedish market.

"There is no room in the budget and there has been no agreement within the alliance," Reinfeldt told news agency TT.

EU regulations state that any reduction in taxes on beer must be followed by similar reductions when it comes to wine.

Public health minister Maria Larsson, a Christian Democrat, had already distanced herself from the proposal. She is now joined by the prime minister.

"We have not yet reached an agreement with our alliance partners and we should not do anything in this area if we are unsure of the budgetary effect.

"It is very important at the moment that we underline that we want to reduce tax on employment, which means that there will not be as much room for all other types of tax cuts," said Reinfeldt.

The prime minister said he was aware of his party colleagues' view that the proposal would not have a budgetary effect if balanced by higher taxes on spirits.

"But I want to be sure that we have evidence that this really is budget neutral and I want to discuss the matter with my alliance friends," said Reinfeldt.

Prior to the election, the Moderate Party had argued in favour of reducing alcohol taxes. And despite rejecting the proposal suggested by his party colleagues, the prime minister is critical of the former government for not cutting taxes on alcohol.

"We are now seeing what we warned would happen if tax changes of this kind were not put forward: renewed alcohol tourism and different patterns of buying and selling in Sweden.

"A number of the social consequences that we warned about have come about because the previous government did not put forward a proposal.

"And one can maintain that it will carry on like this until there is a change in taxation. But I would contend that it is more difficult to make a change now because the change in behavioural patterns has already taken place," said Reinfeldt.

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