Borg criticizes municipalities' tax planning

The government wants the Swedish Tax Agency to specifically review the business affairs of municipality-owned companies. The move comes after Swedish Radio News reported that many of these municipality-owned companies were using aggressive tax planning to avoid paying taxes.

"It's clearly inappropriate that these companies that are financed and depend on tax money would use this type of tax planning," says Finance Minster Anders Borg.

A recent Tax Agency review found that around 25 municipal-owned companies have used aggressive tax planning, totaling $US 88 million in lost tax revenue for the tax year 2010-2011. By taking loans with high interest rates, these companies try to make profits disappear in order to pay less tax.

During the fall and winter, several private-equity companies that run healthcare facilities were criticized for using the same methods.

Borg says the review will be completed before the summer.