Government U-turn on further tax cuts

Swedish political pundits on Wednesday were left pondering the ruling Moderate Party's announcement that it would not promise further income tax cuts in the run-up to next year's elections.

Government U-turn on further tax cuts

Party leader and Prime Minister Fredrik Reinfeldt said Tuesday that the there was little room for maneuver when it came to tax reform and that meant other policies had to be prioritized. In a tally by the Dagens Nyheter newspaper, his conservative coalition has slashed 139 billion kronor in total since taking power in 2006. Most of the cuts comes from the five subsequent income-tax reductions, meant in part to stimulate wage earners to increase consumption

A sixth income-tax cut was on the table, but the budget released by pony-tailed Finance Minister Anders Borg in the summer caused a ruckus on all sides of the political landscape, with observers scratching their heads.

“There is currently a deficit in the general government sector, largely due to the recession. If tax cuts or expenditure increases of 25 billion are implemented next year, consolidation measures are needed to meet the one percent target in the medium term,” National Institute of Economic Research (NIER) Head of Public Finance Analysis Erik Höglin told the Local in June.

“It is not impossible to enact reforms of 25 billion, but there will be a need to make savings later.”

Reinfeldt said on Tuesday that the space for reform was “tight”.

“That means it is important that our investments are targeted to, above all, education. That’s why I’m ready to wait to implement tax cuts,” Reinfeldt told the business daily Dagens Industri.

Politicos on Sveriges Radio (SR) spent Wednesday morning wondering if the Reinfeldt U-turn on tax cuts was an attempt to cash in on key focus areas of the opposition – for example, schools.

“Next year’s election campaign focus will be that we like the taxes where they are, but my opponents want to increase them heavily,” Reinfeldt added.

TT/The Local/at

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Denmark suspects two Swedes over explosion at tax authority

Two Swedish citizens are suspected in connection with last week’s explosion at the Danish Tax Agency. One of the two is in police custody.

Denmark suspects two Swedes over explosion at tax authority
Copenhagen Police superintendent Jørgen Bergen Skov addresses the press. Photo: Philip Davali / Ritzau Scanpix

Copenhagen Police superintendent Jørgen Bergen Skov confirmed the arrests to press on Wednesday morning.

“Both individuals are suspected of carrying out the detonation at the Tax Agency,” Skov said.

One man, aged 22, was arrested in Swedish city Malmö on Tuesday and will be extradited to Denmark. Once he reaches Copenhagen he will appear for preliminary court proceedings, which the prosecution will request take place behind closed doors.

Swedish newspaper Kvällsposten reports the 22-year-old has no previous criminal convictions in the country.

The second man, a 23-year-old, is yet to be detained but an international arrest warrant for him has been issued, Skov said.

“During the night, we also searched several addresses in Sweden. We hereby confiscated what we believe to be a car used by the suspects,” he said.

“We have one suspect on the loose, which means we must be careful about what we say, out of consideration for the investigation,” he added.

The superintendent did not add any detail about how police were able to connect the two individuals to the August 6th explosion.

Skov also stressed that police do not believe the tax authority blast to be connected to a similar incident at a police station in Copenhagen’s Nørrebro neighbourhood in the early hours of Saturday.

“There is nothing to suggest (a connection),” he said.