STOCKHOLM (Reuters) - Sweden’s center-left minority government is proposing a corporate tax cut to 20 percent from 22 percent, Finance Minister Magdalena Andersson and Financial Markets Minister Per Bolund said on Monday in an opinion piece.
They said the finance ministry would on Tuesday put out a memorandum, which also includes a proposal to limit interest deductions for companies, for consultation with interested parties.
“With the proposals we want to strengthen competitiveness and create a more dynamic business climate,” they said on business daily Dagens Industri’s website.
The proposals aim at making it less beneficial to finance a business with loans, and more beneficial to finance it with equity.
“The latest financial crisis as well as the Swedish financial crisis in the 1990’s have shown that too high a debt level in the corporate sector can have substantial negative consequences,” they said.
“Beneficial interest deduction regulation gives companies incentives to finance their businesses with loans.”
The proposed corporate tax cut would be fully financed, they said, adding they propose the changes would be implemented on July 1, 2018.
Reporting by Anna Ringstrom; Editing by Toby Chopra