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Sweden wants a bank tax that ‘really hits’ the right targets

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Finance Minister Magdalena Andersson says her goal is to have a levy that singles out banks with far more precision than previous proposals.

[STOCKHOLM] Sweden's government wants to revisit the idea of imposing a tax on the financial industry.

Finance Minister Magdalena Andersson says her goal is to have a levy that singles out banks with far more precision than previous proposals.

"It should include only the financial sector," she said in an interview in Stockholm. "We want one that has a more narrow tax base, which really hits what it's meant to hit."

The proposal -- part of a broader planned tax reform -- is likely to make its way through parliament as banks in Sweden get dragged into a money laundering scandal that has dominated headlines across the Nordic and Baltic regions. Most recently, Swedbank AB was targeted by allegations that it handled billions of dollars in dirty money. The bank has had a criminal complaint filed against it by Bill Browder, an investor best known for chasing Russian money launderers.

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Tax Evasion, Laundering

Allegations that banks operating in Sweden have been involved in money laundering and helped rich clients evade taxes have shaped the public's perception of the financial industry. Andersson says voters aren't likely to feel too sorry for banks if the government is able to move ahead with its planned tax. She's previously discussed a tax of around 4 billion kronor (S$576 million), which would target the biggest banks in Sweden.

"Sympathy for the banks hasn't been so strong," Andersson said. "It's not like the love of banks is something that permeates the Swedish soul."

Swedish banks trailed behind the Bloomberg index of European financial stocks on Tuesday. Svenska Handelsbanken AB opened lower, while SEB AB and Swedbank AB were little changed about 40 minutes after trading started in Stockholm.

It's not the first time that Sweden's center-left government has tried to push through a financial tax. Previous attempts stalled after bumping up against European Union competition rules. Efforts to refine the proposal also failed after local authorities criticized it for putting Swedish firms at a competitive disadvantage.

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More recently, the Social Democrats of Prime Minister Stefan Lofven have looked into designing a tax that targets bank operations regardless of where the parent company is based. The idea follows a decision by Nordea Bank Abp to move its headquarters to Finland from Stockholm.

When it comes to allegations of money laundering against Swedbank, which is Sweden's biggest mortgage lender and the country's oldest bank, Andersson says the government is "very concerned."

"The bank needs to fully cooperate with the authorities and of course, we want to know what happened," she said.

Swedbank is being investigated by the financial supervisory authorities of Sweden and Estonia after broadcaster SVT published a report alleging the bank handled almost $6 billion in suspicious funds linked to the Danske Bank A/S Estonian laundering scandal.

Swedbank has acknowledged it handled questionable transactions, which it says have been reported to the police. The bank has hired an external consulting firm to review the matter. The findings are due by the end of the month.

 

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