Different laws in various EU operating sectors andcompeting fees threatens Swedish firms
Sunday, 19 May 2013
Swedish construction and transportation sectors have been calculated to
be worst exposed to the effects of extreme competition and distortion
from various EU tax rules and fees. The effect is that it could heavily
affect Swedish businesses and companies as they try to be more
Using the tax systems from different EU countries and various form of
fees companies in Sweden will almost halve their labour costs. This
creates distortions of competition and is a threat to the Swedish
companies, those that pay their taxes at home in Sweden.
This is the assessment of the Swedish labour organisation, LO as it
addresses the problem in a report to be released tomorrow. The new LO
report shows how companies can use the EU's freedom of movement in
order to create packages with lower taxes or no taxes at all.
For example, a company operating in Sweden be registered in Ireland and
recruit workers from Poland, according to Claes-Mikael Jonsson, a lega
expert in LO.
"You pay payroll taxes in Ireland for 12 percent, compared with 32
percent in Sweden. And, in Poland the income tax a customs fee, it is
up to the employee to pay it. What we see when we meet with these
workers is that there end up with no tax paid in Poland," said
Companies can thus reduce their costs properly without violating
Swedish collective agreements. As the agreements, governing the gross
wages meets such in other countries.
The construction and the transport sectors are most exposed
according to Claes-Mikael Jonsson who also indicates that the
sector are in trouble.
"The transport sector is falling south because of this type of competition," says Claes-Mikael Jonsson.
In the construction industry, officials such as Jens Hoffmann, managing
director of construction company Dipart, says this competition means
that they cannot compete.
"We can not compete against this kind of business. Even now, we have
changed our business models such that even fir a simple job, we not
compete because our wages are too high. Instead, we take the more
advanced jobs," says Jens Hoffmann.
In such circumstances, Swedish companies that are exposed will
according to LO to eventually lead to a downward pressure on wages and
that the Swedish tax revenue will disappears.
Besides this LO is also looking at working environment and the safety
of those who come here from other countries to work. Employers would
exploit them for they know that these new workers don't understand what
their rights are and how teh working systems and safety rules are.
"There are many who come to Sweden to work in the construction
industry. The work environment is reprehensible, wages are unreasonably
low, breaks and holidays are not honoured if at all," says Jens
To prevent this, LO is pressing on new law that allows the main
contractor to have full responsibly for subcontracting a
project and also manages taxes correctly.
LO also urges the government to work more closely with other EU
countries to ensure that taxes are actually paid in the different
by Scancomark.com Team
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