The Swedish government has decided to scrap the proposed bank tax after heavy criticism from numerous stakeholders. The government means that the debated proposal would have too far-reaching consequences for other sectors than what was intended. The current proposal will therefore not be proceeded with during this government period. However, the plan of a bank tax will not be dropped completely but the Swedish government will look at alternatives on how to introduce a bank tax that will reduce the banks’ tax advantage.

Instead of going forward with the bank tax as planned, the government proposed a higher resolution fund fee. Banks pay an annual fee to the national resolution fund, as a part of crisis management. The increase of the fee to the resolution fund would mean strengthened resolution reserve as well strengthened public finances according to the Swedish government. The proposal has entered the national consultation process this week.