STOCKHOLM, Dec 15 (Reuters) - Swedish Finance Minister Anders Borg said on Wednesday the government would draw up plans to cut value-added tax on restaurant meals to 12 percent from 25 percent in an effort to boost jobs.
The VAT cut was part of the centre-right coalition's manifesto for elections in September when it was returned to power, but without a majority.
The Alliance government will also look at cutting VAT in other areas of the service sector, Borg said in a signed article for the Dagens Industri newspaper. He did not say how much VAT reform would cost.
Sweden has bounced back sharply from the downturn and unemployment has started to decline. Borg said that more needed to be done to boost jobs, although stabilising government finances remained the priority.
'It is important to be clear that a cut in VAT for the service sector won't happen until we are sure public finances are in surplus and we have actual room for reform,' Borg said.
Unlike many countries in Europe, Sweden's finances are in good shape despite the recent downturn. The government is expected to run a small budget deficit this year but to be back in the black next year and to see a growing surplus thereafter.
Borg said the government would present a report on the plan by March at the latest, with a final proposal in October.
The centre-right won power in 2006 promising income tax and welfare cuts that would make it more attractive to work.
Its programme for a second term promised more modest measures, with tax cuts mainly focused on reducing the burden on pensioners.
(editing by David Stamp) Keywords: SWEDEN VAT/ (Stockholm Newsroom, +46-8-7001017; e-mail: stockholm.newsroom@reuters.com) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
The VAT cut was part of the centre-right coalition's manifesto for elections in September when it was returned to power, but without a majority.
The Alliance government will also look at cutting VAT in other areas of the service sector, Borg said in a signed article for the Dagens Industri newspaper. He did not say how much VAT reform would cost.
Sweden has bounced back sharply from the downturn and unemployment has started to decline. Borg said that more needed to be done to boost jobs, although stabilising government finances remained the priority.
'It is important to be clear that a cut in VAT for the service sector won't happen until we are sure public finances are in surplus and we have actual room for reform,' Borg said.
Unlike many countries in Europe, Sweden's finances are in good shape despite the recent downturn. The government is expected to run a small budget deficit this year but to be back in the black next year and to see a growing surplus thereafter.
Borg said the government would present a report on the plan by March at the latest, with a final proposal in October.
The centre-right won power in 2006 promising income tax and welfare cuts that would make it more attractive to work.
Its programme for a second term promised more modest measures, with tax cuts mainly focused on reducing the burden on pensioners.
(editing by David Stamp) Keywords: SWEDEN VAT/ (Stockholm Newsroom, +46-8-7001017; e-mail: stockholm.newsroom@reuters.com) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.