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Swedes pay 70 percent of salary in taxes: study

Swedes who earn a salary on par with the average municipal worker contribute the equivalent of 70 percent of their monthly salaries in taxes, a new study has found.

Swedes pay 70 percent of salary in taxes: study

Workers who earn 25,000 kronor ($3,810) per month end up paying 69 percent, or 17,200 kronor per month, in taxes, according to an analysis carried out by Swedbank.

According to Statistics Sweden, the average salary of a municipal worker in Sweden in 2011 was 25,000 kronor.

Meanwhile, two-child households earning 55,000 kronor per month contribute 38,000 kronor in taxes, Swedbank found.

The sum includes taxes deducted from one’s paycheck; value added taxes paid on consumption; as well as payroll taxes paid by employers.

All told, taxes account for Swedes’ largest monthly expense by far.

“Taxes visible in our paychecks are one thing, but when you include taxes on consumption and payroll taxes, taxes end up being three times as high,” Maria Ahrengart of Swedbank’s Institute for Personal Finance (Institutet för Privatekonomi) said in a statement.

In 2011, Swedes paid a total of 1.56 trillion kronor in taxes.

According to Swedbank’s analysis, which traced exactly where Swedes’ tax money is spent, municipalities and the pension system consume most of what Swedes pay in taxes.

“It’s good to know what the money actually goes to and how tax money is divided,” Ahrengart told the TT news agency.

Of the 17,200 kronor in tax generated by a monthly salary of 25,000 kronor, 6,100 kronor or about 35 percent, goes to municipal taxes, while the pension system receives 4,300 kronor, or about 25 percent.

Taxes paid directly to the state account for just under 20 percent of the worker’s tax bill, or about 40,000 kronor per year.

Of that sum, about 1,700 kronor goes to help pay Sweden’s European Union membership fee, with an equal amount going toward foreign development aid.

About 3,000 kronor is spent annually on education, compared with 2,500 kronor on defence and 4,200 on children and family programmes.

Meanwhile, of the 73,000 kronor paid in local taxes annually, elderly care consumes the largest amount — 14,000 kronor, or about 19 percent — while childcare and education account for about 30,000 kronor, or 41 percent.

“Much of what we pay in, we get out again in different ways,” Ahrengart told TT.

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MONEY

How to avoid falling victim to tax scams in Sweden

Sweden's tax agency, Skatteverket, warns of an increase in scams when it's time for Swedish tax-payers to declare their taxes.

How to avoid falling victim to tax scams in Sweden

Anyone who earned more than 22,208 kronor last year received their tax returns digitally last week, marking the start of tax season.

That also means an expected peak in tax-related scams, Skatteverket warns.

Most of the scams are so-called phishing scams, meaning attempts to steal the victims’ personal information. Fraudsters may for example email a person, pretending to represent Skatteverket, and ask them for, among other things, their banking details.

“We’re seeing these in all channels. They use fake emails, SMS, letters and in some cases even phone calls. It is particularly common in tax declaration times – just when we’re about to send out the tax returns, the e-service opens and it’s possible to declare – but above all when it’s time for tax rebates,” Jan Janowski, a Skatteverket expert, told Swedish news agency TT.

A scam email might for example state that you’re entitled to a tax rebate and that you should click a link to receive it. Don’t click any links, open any attachments or reply to the message. Skatteverket advises that you immediately delete the email or text message.

Another common scam is that you receive a text message claiming to be from Skatteverket, telling you that you owe them money and you need to log in to calculate the amount. The website you’re urged to log in via does not belong to Skatteverket. Don’t click the link.

The agency stresses that it never asks people for their banking details. The exception is that you may be asked for your bank account information if you log into Skatteverket’s website to declare your taxes, but that always first requires you to log into the site.

To receive your tax rebate, you need to inform Skatteverket of your bank account number. You do this not by clicking a link in an email or SMS, but by logging into their website using a digital ID, for example BankID, and submitting your details. Only do this on your own initiative. If someone calls you and asks you to log in with your BankID during the phone call, don’t do it. That’s another common scam.

Skatteverket will also never call you to ask for your bank account or credit card number.

It will be possible to declare your taxes from March 19th. You’ll receive any tax rebate you’re owed by mid-April or early June, depending on when you submit your tax return. These are the dates when fraudsters are likely to attempt the most scams.

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