Swedes pay less tax than the Danes and French
The Local · 31 Dec 2013, 09:39
Published: 31 Dec 2013 09:39 GMT+01:00
Nordic neighbours Denmark along with Belgium and France pay more tax each year reports Sveriges Radio. Sweden has regularly topped the list for the nation with the highest EU tax rate with income taxes of 50 percent of GDP.
However, that figure has now dropped to 45 percent which is estimated to be a 100 billion kronor ($15 billion) reduction into the tax system.
"This is the outcome of the economic policies implemented over the last few years which set out to reduce taxes as share of the economy," said Daniel Waldenström, professor of Economics with Uppsala University to SR.
In September the Swedish government announced plans to slash taxes for the fifth time since taking office in 2006.
The latest round of tax credits will be worth around 350 kronor ($53) for those earning an average salary of around 27,000 kronor per month. Sweden's government has claimed that the tax cuts will generate an estimated 13,000 jobs.
Prime Minister Fredrik Reinfeldt said in October that the Swedish economy was its strongest for 40 years.
His attempts to bring in a lower tax rate for high earners was canned after the government lost a vote by a narrow margin in December.
Sweden's Riksbank cut the country's repo rate by 0.25 percentage points to 0.75 percent in December citing lower than expected inflation.
The EU average for tax to GDP ratio is 40 percent with analysts saying that Sweden could reach that mark within a decade if the present rate of tax cuts continues.
"The tax cuts could push Sweden closer to some sort of breaking point," added Waldenström to SR.
Danes pay the most tax in EU followed by Belgium and France.