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UPDATE 1-Swedish commission calls for 15 pct bank payroll tax
November 7, 2016 / 10:23 AM / 10 months ago

UPDATE 1-Swedish commission calls for 15 pct bank payroll tax

(Adds Bankers Association quote, background, detail)

STOCKHOLM, Nov 7 (Reuters) - Swedish financial services firms should pay an additional payroll tax of 15 percent, a commission appointed by the centre-left government said on Monday, a levy the sector has said would cost thousands of jobs.

Swedish banks have some of the highest capital requirements in Europe and pay into a stability fund designed to protect tax payers from the need to bail out firms if there is another financial crisis.

But the Social Democrat-Green coalition believes the sector remains under taxed as financial services are exempt from value-added tax, a perk worth about 19 billion crowns ($2 billion), according to the commission.

“Depending on the degree the tax is passed on in prices for financial services and affects salaries in the financial sector, income from the tax is estimated at 3.7 billion-7.0 billion Swedish crowns in 2018 prices, probably in the upper range of that interval,” the commission said in a statement proposing to introduce the tax in 2018.

Industry lobby groups and trade unions representing bank workers said last month an extra payroll could cost up to 16,000 jobs.

The tax would also make it more difficult to attract firms looking to relocate from London after Britain’s vote to leave the European Union.

“To tax away thousands of jobs is a deeply irrational policy,” head of the Swedish Bankers’ Association, Hans Lindberg, said.

The four top Swedish banks are expected to make a combined net profit of about 80 billion crowns this year.

Denmark has a similar tax on banks and in neighbouring Norway the government plans to impose a 5 percent bank payroll tax in 2017.

$1 = 9.0049 Swedish crowns Reporting by Simon Johnson and Johan Sennero; editing by David Clarke

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