Bank Tax Sets Funds With $180 Billion Against Swedish State

  • Folksam CEO leads group of Swedish insurers fighting tax
  • Swedish bank minister has said he’s listening to feedback

Some of Sweden’s biggest insurance companies and pension funds are adding their voice to the chorus of detractors calling on the government to rethink a planned tax on financial firms.

Just days after Sweden’s competition watchdog criticized the government’s draft proposal, another group of stakeholders is adding pressure on the ruling coalition to rework the outline of its planned levy to exclude insurers. Banks have already warned that moving ahead with the tax would put around 16,000 finance jobs at risk, with Scandinavia’s biggest lender, Nordea Bank AB, suggesting it might move parts of its business outside Sweden. The minister in charge has said he’s listening to the feedback.

Jens Henriksson, the chief executive officer at one of Sweden’s biggest insurance companies, Folksam, says the government’s plan to impose a 15 percent payroll tax on financial firms represents a cost that would hurt jobs in the insurance industry that creates an important financial buffer in society. The tax would increase costs for Folksam by 300 million kronor.

“To attack the part that’s perhaps growing the most, namely the occupational pensions, by adding another tax wouldn’t be good,” he said in an interview in Stockholm on Thursday. “In the end, someone will have to pay more.”

Folksam is leading a group of insurers that’s urging the Social Democrat-led administration to reconsider. Other insurers in the group include AMF, KPA Pension and Alecta. Together they manage assets equivalent to about $180 billion.

Henriksson says adding costs would reduce incentives for Swedes to buy insurance. The government has already abolished the ability to deduct pension savings from taxes. That’s problematic because pensions provided by the state only average half of Swedes’ monthly incomes, Henriksson said.

Unlike some of its peers, Folksam, which has many of Sweden’s biggest unions represented on its board, doesn’t have the option to move outside the country to cut costs, Henriksson said.

Telling those unions “that we will move all jobs abroad wouldn’t work very well, to put it mildly,” he said.

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