Sweden: A decision by Sweden's government to cut taxes on alcohol by as much as 40 % was postponed until the fall, officials said Wednesday, 23 February 2005. The government proposed the tax cut last year, in part to discourage the import of alcohol from abroad and to help boost sales at the country's state-owned liquor monopoly, according to Associated Press.

Taxes on beer, currently at 7.40 kronor (euro0.80; US$0.99) per liter (quart) would not be affected. But, that could change too as Sweden has until September to respond to a caution from Brussels that it must stop taxing wines at a higher rate than beer, or face possible court action.

A decision to trim the tax on alcohol had been expected to be part of the government's new spring budget, but the leader of the Left Party, a key supporter of the governing Social Democrats, said it had been removed.

Sweden's taxes, at about 51 percent, are the highest in Europe, and form the bedrock of its fabled cradle-to-grave welfare system.

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