Sweden on Sept. 8 announced plans to cut the corporate tax rate from 28% to 26.3% in 2009 in a bid to improve the business climate. The move is part of a 16-billion-kronor (US$2.4 billion) package the government will formally present in its budget bill to parliament later this month.

Reducing the corporate tax rate will cost around 7.0 billion kronor.

The government said it would also reduce social contribution fees paid by employers by around one percentage point, a move that will cost another 7.5 billion kronor.

"The tax proposals strengthen the incentive for investment and new hires, while simplified regulations reduce companies' administrative burdens," the government said.

"This, combined with other initiatives presented in the budget bill, will soften the blow of the slowing economy and mitigate the effects on the labor market," it said.

Copyright Agence France-Presse, 2008