Sweden Should Cut Company Taxes, Boost Investments, PM Says

Swedish Prime Minister Fredrik Reinfeldt said he will seek to raise spending on infrastructure projects and research next year and lower corporate taxes to boost the potential of the largest Nordic economy,

The economy has shown “great resilience” to Europe’s debt crisis, the premier told reporters today at a press briefing on a boat in the Stockholm archipelago.

“It’s about using our capacity to build a strong Sweden in the long-term and to invest and equip ourselves to protect jobs and get more jobs and more investors to come to Sweden,” Reinfeldt said.

The government may be able to spend more than previously predicted next year after growth exceeded estimates last quarter, Finance Minister Anders Borg said last week. The economy grew 2.3 percent in the second quarter, compared with analyst estimates of 0.6 percent.

The government parties have agreed to lower the corporate tax to 24 percent from 26.3 percent, Svenska Dagbladet reported today, citing people familiar with the plan. The reduction will cost 6.3 billion kronor ($942 million) and be financed by limiting some corporate interest deductions, the newspaper said.

Reinfeldt said today he would push for a more forceful corporate tax cut than what can be paid for by closing the loophole on interest deductions. The premier will need to agree on budget measures with the remaining parties in his coalition. Next year’s fiscal policy will be presented on Sept. 20.

The premier today also called for the four government parties to create a joint platform ahead of 2014 parliamentary elections in a letter published in newspaper Dagens Nyheter. The minority government, headed by Reinfeldt’s Moderate party, has presented joint policies ahead of both of their election victories in 2006 and 2010. The government also consists of the Liberal, the Center, and the Christian Democratic parties.

To contact the reporter on this story: Johan Carlstrom in Stockholm at jcarlstrom@bloomberg.net

To contact the editor responsible for this story: Jonas Bergman at jbergman@bloomberg.net

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