Business leaders urge cut in Sweden's capital gains tax
David Landes · 24 Jun 2009, 16:02
Published: 24 Jun 2009 16:02 GMT+02:00
The Confederation of Swedish Enterprise (Svenskt Näringsliv) on Wednesday presented the findings of a commission appointed by the organization charged with proposing a series of reforms to Sweden’s tax system.
Highest on the group’s wish list is a major reduction in the tax on capital from its current rate of 30 percent, which is roughly twice as high as the average in 34 other countries against which Sweden competes, according to the commission.
“The tax is unnecessarily high in Sweden,” Rune Andersson, chairman of the board of Melby Gård farms and stables, and a member of the Confederation of Swedish Enterprise’s tax commission, told the Dagens Industri newspaper.
“It leads to a shift in ownership in the country where today Swedish families account for less than 10 percent of direct ownership. Eventually we’ll only have institutional ownership.”
Andersson argued that private owners are more likely to take risks and put more effort into ensuring companies succeed and that a more equal balance of power between owners and management protects against excesses like controversial bonuses which have plagued a number of larger Swedish companies in recent months.
According to the commission, the tax burden facing business owners is a key question for the future of Swedish business.
“The problem in Sweden isn’t that we have too much private ownership. Rather, it’s that we have too little private ownership,” said tax commission member Carl Bennet, chair of the medical equipment manufacturer Getinge, in a statement.
“Instead of the situation today, where we have maybe 10 or 20 large owners, we ought to have at least 100 large owners, 500 mid-sized owners, and thousands of smaller ones. That would create more dynamism.”
The proposed reduction in the capital gains tax comes as part of a call for larger changes to the Swedish tax code to help stimulate risk-taking and ensure Sweden remains competitive internationally.
Other proposed changes include measures to make it easier and more profitable for companies to hire new employees as well as reduction in the taxes incurred when hiring highly-qualified foreign workers.
In addition, the commission wants to see the tax system simplified and made more transparent.
“Swedish politicians need to open their eyes and make it possible for Swedish companies to be competitive when the economy recovers,” said Urban Bäckström, chair of the commission and head of the Confederation of Swedish Enterprise, in a statement.