Swedish trade minister resigns amid tax scandal

STOCKHOLM, Oct 14 (Reuters) Sweden's Trade Minister Maria Borelius has resigned after only a week in office over media reports accusing her of dodging paying taxes, Prime Minister Fredrik Reinfeldt said today.

The Reinfeldt cabinet's first week in office has been one of mounting embarrassment as several of its members have admitted not paying taxes and other mandatory fees -- a not uncommon practice among Swedes facing one of the highest tax burden in the world, but deplored when practised by their politicians.

Swedish daily Dagens Nyheter on Saturday carried the headline ''The nightmare start'' to describe the first days of the government which ousted the Social Democrats after 12 years in power last month, promising a clean break from years of left-of-centre rule.

''I talked with Maria (Borelius) this morning and she herself felt that she did not have the strength to go on and we agreed that she would resign,'' Reinfeldt said in a radio interview.

Shortly after Borelius was appointed minister in Sweden's new centre-right cabinet, Swedish media said she had employed a nanny without paying taxes or social contribution fees.

In the following days, the media said Borelius, member of the biggest party of the coalition government, Reinfeldt's own Moderate Party, had bought a summer home in southern Sweden through a firm based in tax haven Jersey, thus avoiding paying full taxes on the real estate.

She has publicly apologised for not employing the nanny on a proper footing and said she welcomed a government inquiry into her financial dealings over the summer house.

''The basis of this (decision to resign) is that there are several question marks of an economic nature, some of which she informed me about and some which she did not,'' Reinfeldt said.

Borelius' exit, the first resignation from Reinfeldt's four-party government, could be followed by others.

The opposition has called for the resignation of Moderate Party Culture Minister Cecilia Stego Chilo.

Chilo has also said she employed a nanny without paying the necessary taxes and fees, as well as not paying the obligatory public service television fee, a fee paid by all Swedes who own a television, for 16 years.

Borelius and yet another cabinet member, Migration Minister Tobias Billstrom, have also admitted to not paying their television fees, a common offence in Sweden, but unusual among its top politicians.

The government, which ran on an election platform of more jobs and lower taxes and unemployment benefits, is due to present its first budget bill on Monday.

REUTERS BDP VV1935