‘Exaggerated’ Banker Complaints Won’t Kill New Swedish Tax Planby
Sweden’s minister in charge of bank legislation dismissed industry complaints that a planned tax will wipe out almost a fifth of the country’s financial jobs.
The government is determined to move ahead with a plan to impose a new payroll tax on financial industry jobs, setting itself a January 2018 deadline, Financial Markets Minister Per Bolund said in an interview in Stockholm on Thursday.
The plan has shocked the country’s financial industry, with the Swedish Bankers’ Association saying that as many as 16,000 jobs could be lost. Bjoern Wahlroos, the chairman of Nordea Bank AB, has warned that such an overhaul of the tax code could force lenders to move operations outside Sweden.
Just a few months ago, Nordea explored a possible merger with Dutch state-owned ABN Amro Group NV, according to a person with knowledge of the matter. In the event, the Netherlands rejected the proposal, the person said. Spokespeople for Nordea, ABN Amro and the Dutch finance ministry all declined to comment.
Wahlroos told the Swedish government last year that banks are free to decide whether parts of their business “can be located here, or they can be located in Copenhagen, or in London, or wherever,” according to an interview in May 2015.
But Bolund says the numbers being cited by the industry aren’t final and urged bankers not to assume the worst.
Asked whether 16,000 jobs will be lost, Bolund said “it’s hard to see that operations could be reduced that dramatically.” The numbers that the financial industry cites seem “a little exaggerated,” he said.
The Swedish Bankers’ Association said the review it saw indicated the government was considering a 15 percent tax on financial industry pay. Bolund said the administration hasn’t yet decided what the rate should be and cautioned against reading too much into the internal review.
The minister also dismissed financial industry complaints that such a tax, which coincides with stricter capital requirements targeting risk weights, would hurt Swedish bank profits. Bolund said he’s “not worried” that the industry will be able to handle new capital requirements and higher taxes.