Finland to Cut Corporate Taxes
March 22, 2013 Taxation in Finland
HELSINIKI – Finland is proactively looking to reduce its budget deficit by using taxes to boost revenues and to encourage economic growth at the same time.
While speaking at a press conference in Helsinki on March 21st the Prime Minister of Finland Jyrki Katainen announced that the government intends to cut the rate of corporate income tax from 24.5 percent to 20 percent.
The decrease in the tax rate will be funded by hikes to the rate of taxes applied to the sale of alcohol, tobacco and confectionery.
The government will also raise the taxes applied to electricity, as a concession to the Green League, which has been calling for raised energy taxes as a means of encouraging consumers and electricity producers in Finland to utilize greener and more efficient technology.
Currently the government estimates that the net impact of the tax changes will be a EUR 300 million increase in total tax revenues.
The government also plans to cut spending by approximately EUR 300 million, a plan which was met with almost immediate opposition from the public, despite the Prime Minister’s assurances that the spending cuts will not affect the country’s welfare support systems.
The tax changes and spending cuts are part of the government’s efforts to reduce Finland’s budget, which is currently projected to be 1.5 percent of GDP in 2013.
Photo by European People’s Party – EPP