February 25, 2017 / 12:11 PM / 3 years ago

Sweden to draft new bank tax, not sure if ready before 2018 election

STOCKHOLM, Feb 25 (Reuters) - Sweden’s government will draft a new bank tax proposal after scrapping its initial plan, but it is unclear if the new bill will be ready before the 2018 election, Finance Minister Magdalena Andersson said on Saturday.

The centre-left minority government said on Friday it had decided to scrap an earlier proposal for a payroll tax on financial services, commonly known as a bank tax, after criticism that it would hit many more companies than originally intended.

The government said that the new proposal would be more narrowly directed at the banks but that it would take time to compile as the European Union would have to weigh in on whether the new draft is in compliance with state aid regulations.

“It is not certain that it can be implemented before the elections,” Andersson said at a news conference.

The government had hoped to have the tax in place before the September 2018 elections.

The timeline is important because the opposition flatly rejected the earlier proposal, saying it would only force the banking sector, including Nordea, Handelsbanken , Swedbank and SEB, to move staff abroad.

The government has long sought to impose a financial services tax, saying the sector - which is exempt from value-added tax - is doing well and should pay more to the state. (Reporting by Johan Ahlander and Bjorn Rundstrom; Editing by Hugh Lawson)

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