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Swedish taxpayers to get 13.5 bln crown windfall in 2021 budget

STOCKHOLM, Sept 10 (Reuters) - Sweden’s centre-left government will lower income taxes by a combined 13.5 billion Swedish crowns ($1.55 billion) next year to boost the pandemic-hit economy, the Centre Party, which backs the ruling coalition’s budget bills, said on Thursday.

The Centre Party is not part of the government, but the minority coalition has to negotiate the budget with it and the Liberal Party to get finance bills through parliament.

The tax cut will be aimed at low and middle income earners and will benefit around 7 million of Sweden’s 10.3 million inhabitants.

“What we need now is an economic kick-start to take Sweden forward through the crisis. It is about improving people’s financial security and at the same time getting the wheels turning again,” said Annie Loof, leader of the Centre Party.

The Social Democrat-Green government has promised more than 100 billion crowns of extra spending in its 2021 budget, to be published on Sept. 21.

Sweden, which has seen around 5,800 coronavirus deaths, opted against imposing a strict lockdown, keeping most schools and many businesses open. But the economy has nevertheless taken a big hit, contracting 8.3% in the second quarter compared with the first three months of the year. ($1 = 8.6985 Swedish crowns) (Reporting by Johan Ahlander; Editing by Simon Johnson and Hugh Lawson)

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