You are here

Sweden to introduce bank tax to fund greater defence spending

BT_20190902_KELDEFENCE23IPF_3879513.jpg
A jeep is straddled by bombs in a simulated air attack during the annual show at Kallinge airforce base, Sweden, on Aug 25. Sweden has been strengthening its armed forces and is concerned about increasing tensions with Russia in the Baltic region.

Stockholm

SWEDISH Finance Minister Magdalena Andersson said on Saturday that the centre-left coalition government would introduce a bank tax to help fund greater defence spending from 2022.

The Social Democrats and Greens said on Friday that they had agreed with the Centre and Liberal Parties, which back them in parliament, to boost defence spending by five billion Swedish crowns (S$706 million) a year from 2022 to 2025.

Sweden has been strengthening its armed forces and is concerned about increasing tensions with Russia in the Baltic region. Last year, Sweden said it would buy the Patriot air defence missile system from US arms manufacturer Raytheon Co in a 10 billion crown deal.

sentifi.com

Market voices on:

"The extra (for defence) for 2022 will be financed by an increase in taxes on the financial sector from 2022," Ms Andersson said.

"The banks make big profits each year and have been big winners from corporate tax cuts in recent years," she added.

Ms Andersoon said the levy would bring in an extra five billion crowns per year. She gave no details on how the tax would be constructed.

The Social Democrats have repeatedly raised the idea of a bank tax since taking power in 2014. In 2017 they put such plans on hold after widespread criticism of the way the tax was structured.

Ms Andersson repeated her intention for a bank tax in the run up to the election in 2018.

"We will come back with how this tax will be constituted, but it will be different from what has been discussed previously," she said, adding that the new tax would cover all banks operating in Sweden regardless of where they have their headquarters.

Nordea, the Nordic region's biggest banking group, recently shifted its headquarters to Finland from Stockholm. REUTERS