Letter to the Ministry of Finance regarding increased public costs of the proposed chemicals tax

We welcome efforts aimed at phasing out hazardous substances. However, a large number of stakeholders, not only from the business community, have sharply criticized the proposal as it has been formulated. One serious criticism, expressed by TCO Development and others, is that the tax will not have the environmental steering effect it is intended to have. Well-researched substances are taxed, while documented unsuitable substances, e.g. suspected carcinogens, are not taxed. Another criticism is that the tax will lead to increased trade directly from abroad, as the tax only taxes deliveries that take place within the country.

However, one effect that is probably completely overlooked, which we would like to draw the Ministry of Finance's attention to, is the increased costs for the public sector that the proposed chemicals tax entails. There is no exemption for public purchasers in the proposal. It is unclear how much more the state and municipalities will have to pay, as neither the inquiry in its impact assessment nor the Government in the budget bill have made any cost analysis.

Based on the delivery data we have from both the IT and white goods sectors, we arrive at a total extra cost for central and local government of at least SEK 470 million, excluding VAT, per year over the next five years. This includes purchases of computers of around SEK 300 million and white goods and professional kitchen and laundry equipment of SEK 170 million. Cost items that are not included in the calculation but which will be added are purchases by public sector customers of mobile phones, televisions and radio and sound equipment.

The cost estimates above are approximate, with one exception, namely schools. This area is of particular interest as the Swedish National Agency for Education has submitted a proposal to the government that all schools should be fully equipped with digital equipment in various forms by 2022. A total of around 500,000 digital devices (computers and tablets) are expected to be delivered per year. An estimate of the tax's effect results in a bill of around SEK 170 million excluding VAT per year for the entire school system, including independent schools, or around SEK 140 million in extra tax for municipal schools.

For IT, telecom and white goods companies, as suppliers to the public sector, with contracts extending over many years, it is of course crucial to know how the public sector customers will cope with the increased costs resulting from the tax in budgetary terms. More specifically, we would like to meet you to discuss the following:

• How will these cost increases be handled when the appropriation directions to government agencies are drafted?
• Are there any plans to transfer the revenue collected by the central government through the tax to the municipal sector?

Suitable dates for meetings for our part are October 25 and 28.

Yours sincerely
Anne-Marie Fransson, Director of the IT&Telecom Association
Catherine Karagianni, Chairman of the IT&Telecom Companies Sustainability Council
Matts Spångberg, CEO Electrical Household Appliance Suppliers

More information is available at www.kemikalieskatten.se