Finland Could Boost Tax Revenue by Over €1 Billion, Finnwatch Reports
In a recent press release, Finnwatch, an NGO focused on global corporate responsibility, has highlighted potential for Finland to significantly increase its tax revenue. The organization’s tax expert, Saara Hietanen, emphasized that the current Finnish tax system harbors numerous loopholes that are predominantly exploited by corporations and the wealthiest business owners.
The detailed report from Finnwatch identified over 40 areas in need of reform, including corporate taxation, dividend taxation for unlisted companies, and interest deduction loopholes. Hietanen pointed out that these gaps in the tax law allow for strategic tax avoidance planning and called for a more robust enforcement of laws designed to curb such practices.
Furthermore, the report shed light on issues with certain tax treaties and investment instruments that delay taxation. It also criticized clauses in inheritance laws that provide tax relief during the transfer of family fortunes, suggesting that these areas contribute to the loss of potential tax income for the state.
Transparency Issues
Finnwatch’s findings also addressed the transparency of corporate tax dealings in Finland. The report criticized the country’s system for not publishing the names of companies involved in court decisions related to taxation. Additionally, it noted the underutilization of the Finnish Trade Register, which is designed to monitor company ownership and prevent tax avoidance.
Hietanen argued that while Finland is often perceived as a model country for tax information transparency, this is not the case in reality. The lack of openness aids in perpetuating flaws within the tax system.
The NGO underscored that taxation should be viewed as a human rights issue, echoing calls from human rights organizations for states to adopt progressive taxation policies and broaden their tax bases. As Finland’s government, led by Prime Minister Petteri Orpo of the NCP, prepares to discuss next year’s budget, these considerations could play a crucial role in shaping fiscal policy.
With the Finance Ministry indicating a need to trim deficits by nearly three billion euros over three years, Finnwatch’s report suggests that addressing these tax loopholes could contribute over one billion euros annually to state coffers. This would be a value-based decision with significant financial implications for Finland’s budgetary health.
