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A top level business climate

Skrivet av Tony Harkén Wednesday, 22 February 2012.

A top level business climate

 

We have heard that we can offer a top level business climate approximately 100 times by now. In 2006, we finally got a Swedish government that claimed to protect entrepreneurship and businesses, and Sweden should be able to offer a great business climate. We all got excited and thought – it is finally happening.

Now in 2012, the entire 6 years later and after the fact that thousands of jobs have been moved abroad, the Swedish business climate is not even the best in Scandinavia, unfortunately, we are the worst, according to a recent survey. In addition, Sweden goes down on the list for each year that passes, unflattering in other words.

6 years is a long time, there are actually countries in Asia that have built new cities in 6 years.

This is what the tax burden looks like in our country.
A knowledge-driven and research-intensive company as AstraZeneca will pay tax on a factor of 63 percent in Sweden, the company will not have to do that in either the U.S. or the UK.

A tax level that means that AstraZeneca will pay on average 10 percent higher factor taxes as a share of the value added than other businesses in Sweden proves that one can understand if the company moves abroad.

Another interesting comparison is that the automotive industry only pays 45 percent of the tax factor, making AstraZeneca's situation even more absurd. (Source: Almega). Although the automotive industry is and has been "tax-favored" for a long period of time, the result is poor. 45 percent is a high level, if we open our eyes and understand the world around us we can see how the industry is developing.

Looking at these levels of taxation, it is not surprising that most of our global companies leave Sweden for their research intensive activity. Staying in Sweden is actually both irresponsible to the shareholders and the company's future competitive opportunities.

Factor taxes are hitting Swedish companies,
high social security contributions and corporate taxes directly affect the ability for companies to compete and produce, which is devastating on the global arena.

The factor tax affects not only companies such as AstraZeneca, small and medium-sized companies pay more, actually the entire 67 percent. This means that Swedish small and medium-sized companies have profitability problems, which affect growth, development and investments.

Stefan Fölster, Chief Economist at the Confederation of Swedish Enterprise has investigated the origin of profits generated in the economy and the result clearly shows that companies that are younger than 10 years have difficulties to reach profitability.

Companies younger than 10 years account for 47 percent of the companies. One hundred percent of the pure profits are earned by companies that are older than ten years.

This is a serious problem, especially for young businesses´ development opportunities that require external capital. Unfortunately, this is the situation today.


Om Krönikören

Tony Harkén

Helland Consulting AB

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