Sweden's centre-left coalition said on Saturday it would drop two of three planned tax hikes in its 2018 budget, but still plans to introduce an airline tax, confirming media reports earlier this week.
On Monday, the daily Expressen said the government had agreed with the Left Party, whose support it relies on in parliament, to withdraw plans for changes to tax rules for small companies and a measure to increase the number of people paying state income tax.
The centre-right opposition has threatened a vote of no-confidence in a number of government ministries if the minority coalition did not abandon its proposals to raise taxes.
Its usually stable bloc politics has been thrown into turmoil in recent years with the rise of the anti-immigration Sweden Democrats. Neither the centre-left nor centre-right is able to form a majority government without them.
“We still believe that these are proposals that could have contributed to even out gaps (in society),” Finance Minister Magdalena Andersson told a news conference.
“But given the current circus in parliament we have decided to withdraw those proposals.”
The government still plans to introduce an airline tax, albeit a modified version of what was originally planned. Sweden's next election will be held on Sept. 9, 2018.