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Government plans "free economic zones" in depressed neighborhoods

Small businesses welcome proposed tax breaks

Published fredag 10 augusti 2012 kl 15.29
"Too heavy to carry"
(5:25 min)
Dikran Dison owns a glass repair workshop in Rinkeby, and would hire an extra employee if taxes were lower. Photo: Sophie Vukovic/Radio Sweden

This week, the finance department presented a plan to the government that would give problem neighborhoods special economic status. The system is modeled on the special tax zones, or free economic zones, that have been introduced in London and Paris, and it would give tax breaks to boost small businesses in struggling areas. One of these areas is the Stockholm suburb of Rinkeby.

The Stockholm suburb has, along with other like Rosengård in Malmö, become syonymous with high unemployment, high numbers of people living on social benefits, and high school drop outs. Not to mention segregation and discrimination - most of the population were born outside of Sweden. But these problems that now qualify the neighbourhood for a state funded economic boost. On Monday the government was presented with a report outlining plans to introduce around 30 of what are being called "new start zones".

From 2014, the government plans to give small businesses in depressed neighbourhoods tax breaks over a seven year period, making it easier to employ people. They hope this will enable small business owners to compete with other areas and that the many people living on social benefits will be able to find work in their neighbourhood.

Dikran Dison has lived in Rinkeby for most of his life. His brother opened the first local supermarket in the neighbourhood, and Dison himself has been running a glass repair and replacement workshop in the main square for 25 years.

"Our main problem is the taxes. We feel that the conditions for the small businesses are too heavy to carry. Our taxes make our job too expensive for our customers", he told Radio Sweden.

But will lowered taxes for small busniess owners be enough to tackle Sweden's growing unemployment?

In an article in daily newspaper Dagens Nyheter, the opposition Social Democrats criticise the initiative. They say that instead the structural inequalities that lie at the heart of Sweden's unemployment need to be tackled.

They say it is impossible to draw a geographical border around poverty and call for education and integration measures on a wider scale, rather than singling out problem neighborhoods.

Our journalism is based on credibility and impartiality. Swedish Radio is independent and not affiliated to any political, religious, financial, public or private interests.
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