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Slideshow Upbeat Swedish PM eyes corporate tax cut Tweet Share this Email Print Analysis & Opinion Essential reading: Attack targets Romney’s role in Marriott tax deals, and more Essential reading: Watchdog says U.S. IRS allows bogus taxpayer IDs, and more Related Topics World » STOCKHOLM | Sat Aug 18, 2012 9:20am EDT STOCKHOLM (Reuters) - Sweden's center-right prime minister backed a cut in corporate tax on Saturday for his Nordic state as it defies the gloom of the euro zone. The economy grew 1.4 percent in the second quarter and the government has said it might have to revise up its forecast for expansion of 1.1 percent this year. In contrast, a recession is possible in the euro zone. Prime Minister Fredrik Reinfeldt said a cut in corporate tax was necessary to remain competitive. "We know that it (corporate tax) plays a big role in where companies put their production and investments," he told reporters ahead of a traditional summer speech on priorities. He declined to give any figures for the size of the corporate tax cut from the current level of 26.3 percent, which compares with an average 22.9 percent in the European Union. Newspaper Svenska Dagbladet cited sources as saying the government planned to reduce the tax rate to 24 percent at a cost to the budget of 6.3 billion crowns ($939.22 million). Reinfeldt declined to comment on the report. The government has already flagged a corporate tax cut to compensate companies for changes in rules to reduce the amount of tax deductible on interest payments. Reinfeldt said the corporate tax cut he was envisaging should be "even bigger". Personal income tax levels have in Sweden been amongst the highest in the world, while corporate tax levels have been closer to international standards. Reinfeldt also called in an open letter to his three partners in the coalition to form working groups later this year and early in 2013 to draw up joint policies and a manifesto ahead of the 2014 election. Though Reinfeldt led the coalition to a second straight victory in 2010, the government lost its majority after an anti-immigrant party entered parliament for the first time. The minority government has struggled in parliament and caution over the euro zone crisis, despite the solid economic performance, has meant it has not been able to carry out more of its income tax cuts, which have been Reinfeldt's hallmark policy measure in the high tax nation. Opinion polls also show the government behind the center-left opposition, led by the former long-ruling Social Democrats. ($1 = 6.7077 Swedish crowns) (Reporting by Johan Sennero and Patrick Lannin; editing by Ron Askew) World Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (0) Be the first to comment on reuters.com. Add yours using the box above. 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