Leif Östling, the chairman of Sweden's largest business federation, the Confederation of Swedish Enterprise (Svenskt näringsliv), announced his resignation on Wednesday.
The global Paradise Papers leak revealed earlier this month that Östling kept German stocks worth 30 million kronor ($3.56 million) in a company based in Malta. While not suspected of any legal wrongdoing, he ended up in hot water specifically after controversial comments he made defending his financial planning:
“It's a problem with the Swedish tax system, the taxes are insanely high in this country. (…) You ask yourself: If you pay 20-30 million kronor a year – what the hell do I get for the money?” he told public broadcaster SVT.
It is famously said that Sweden has some of the highest tax rates in the world (although it depends on how much you earn), with the cliché being that Swedes happily pay up, safe in the knowledge that the public services they receive in exchange will be of a good standard.
The cliché seemed to hold true as Östling's comments were heavily criticized by trade unions and politicians on both sides of the political aisle. He apologized and admitted that he had expressed himself “carelessly”.
Östling's term as chairman runs out in May, but he announced that he would quit with immediate effect.
“Sweden's entrepreneurs must be able to argue for a better business environment, of which taxes and fees are an important part, without being disrupted by potential debates about me as an individual. After consideration I have therefore reached the conclusion that it is better if I hand over now instead of waiting until May next year,” he said in a statement.
Some of the international figures caught up in the massive Paradise Papers leak were the US commerce secretary Wilbur Ross – who had business dealings with a firm co-owned by Vladimir Putin's son-in-law – and Queen Elizabeth, who saw millions of pounds invested in a Cayman Islands fund.
A total of 382 journalists from 67 countries together investigated the contents of the documents. In Sweden three different news desks were involved in the work: Investigative news programme Uppdrag granskning, SVT news, and news agency TT.
Östling pointed out at the time that although he had invested some of his money abroad, he had also paid 84 million kronor in income tax and 23 million kronor in capital gains tax in Sweden over the last seven years.
“We need tax-financed welfare in the form of healthcare, education, social protection and a strong social safety net,” he wrote in an opinion piece published by newspaper Dagens Nyheter earlier this month. “It is a given that tax should be progressive. This is the only way society can be held together.”
“Someone wrote that if high-income people like us start to whine, this spreads throughout society and threatens the social contract. There's a lot to that. Let me, from this perspective, admit that my comment about what the taxes give us back was careless and unnecessary.”
Östling, 72, who was CEO of truck maker Scania for 18 years, is one of Sweden's most well-known business leaders and is known for being outspoken. He became chairman of the Confederation of Swedish Enterprise in spring 2016. The organization said on Wednesday that its board will meet to appoint a new chairperson.