Swedish 2007 budget scraps new airline tax plan

STOCKHOLM - Sweden's new centre-right government said in its first budget overnight (NZ time) that it would drop plans by the previous administration of Social Democrats for a new tax on airline travel.

Former Prime Minister Goran Persson had been criticised by airlines, including SAS and Ryanair, for a plan for a new environmental tax on air tickets of 94 crowns for travel in Europe and 188 crowns outside.

But in a statement in the budget, the new government said: "The tax on air travel decided by the previous government will not be introduced."

Prime Minister Fredrik Reinfeldt, whose Moderate Party leads the new four-party centre-right coalition, has said its budget, which includes income tax cuts and lower charges for employers, was aimed at boosting jobs and reducing red tape.

- REUTERS