Malmö's mayor Katrin Stjernfeldt Jammeh on Tuesday sent a letter to Magdalena Andersson, Sweden's finance minister, calling for the funds to be paid directly to the municipalities where the commuters live.
“The tax income which Malmöites generate should belong to their home municipality,” she said in a statement. “We want to make it clearer what is what.”
Under a 2003 tax deal with Denmark, the 8,000 people from Malmö and 7,000 from other Skåne municipalities who commute to work across the Öresund strait pay tax on their income in Denmark.
Denmark does reimburse Sweden for much of the lost revenue, but that compensation is paid to the central government rather than directly to the municipalities where the workers live.
It then becomes part of the “local government equalization system”, which Sweden uses to even out the differences in revenues available to municipalities depending on how high earning their residents are.
Stjernfeldt Jammeh warned that this system was creating “a false picture of Malmö's circumstances” as it “made it invisible that many Malmöites live and work in Denmark and that the state compensates for that”.
People working in Denmark are treated as unemployed in Sweden's official statistics, meaning Malmö's employment rate is actually two percent higher than it appears.
The system also makes Malmö look much more heavily reliant on transfer payments from other municipalities than is in fact the case.
“At a time when myths and false information rapidly takes hold, it's important that the state handles both the distribution between the country's municipalities and compensation between Sweden and Denmark transparently and correctly,” Stjernfeldt Jammeh said.