The Swedish Government has today clarified that it, despite broad and sharp criticism from the municipal sector, intends to move forward with an essentially unchanged proposal for a so-called risk tax to be paid by banks and other credit institutions.
If the proposal is adopted and implemented in its current design, this would have severe consequences for municipalities and regions. The proposed set-up implies that Kommuninvest would be targeted by the tax. This means that extra costs of close to SEK 330 million per year would, via Kommuninvest, be imposed on municipalities and regions.
The tax would make it more expensive and difficult for municipalities and regions – particularly for small and medium-sized municipalities – to do the borrowing needed to maintain vital welfare investments: in, for example, preschools, schools, nursing homes, health centers and hospitals. That the government makes a skewed analysis of the economic strength of small and medium-sized municipalities is remarkable and a problem in this context.
Beyond economics, it is also highly problematic that the proposal downgrades municipal cooperation. The government states that collaboration is important, but acts in a different way in practice.
– We have said it before – and now need to say it again: Letting the risk tax hit welfare, which apparently is the Government’s intention, is both unreasonable and unacceptable. The only sensible thing to do is to create an exemption for municipal collaboration through Kommuninvest. It is still not too late for the Government to rethink. To continue to push for such a flawed proposal is not responsible, says Linda Frohm, Vice Chairman of the Board of Kommuninvest Cooperative Society.
– The Government could still embark on a more responsible track. They could rapidly create the exempetion needed to prevent the risk tax from impacting on welfare. There are feasible solutions available. Or they could temporarily put the proposal aside in order to go into an in-depth analysis on how an exemption could be designed. At present, the Government is the wrong track. As it turns out that there is a very large scope for reforms and tax cuts of more than SEK 70 billion, there are no budgetary reasons to push this tax through right now, says Göran Färm, Chairman of the Board of Kommuninvest Cooperative Society.
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