The Budget Proposal For The Year 2013 Published

On 30 August 2012, the Finnish Government agreed on the budget proposal for the year 2013. The expenditures amount to approximately 54 billion euro which exceeds the previous regular budget by 1.6 billion euro. The budgetary deficit is approximately 7 billion euro, which is estimated to increase the overall amount of state debt to circa 96 billion euro. The Government aims to maintain the highest credit rating available. In addition to tax increases, the proposal also aims at stimulating growth by introducing some special tax incentives.

According to the budget proposal, tax revenues for the year 2013 equal approximately 40 billion euro which is roughly 2 billion euro more than the estimated amount for the year 2012; and nearly 4 billion euro more than during the year 2011. All in all, tax revenues account for 85 % of all on-budget revenue. The largest tax receipts are taxes based on turnover, nearly 18 billion euro, i.e. over 40 % of the overall tax revenue. Among all taxes based on turnover, value added tax accounts to almost 17 billion euro. The second largest sources are taxes based on income, whereby taxes on earned income and capital bring in almost 9 billion euro; corporate income taxes amount to over 3 billion euro. Different types of excise duties add up to nearly 7 billion euro - of said amount, taxes on energy total over 4 billion euro.

Generally, the proposal tightens progression in earned income taxation as index increments are abandoned for the years 2013 and 2014. The proposal also takes into account the so-called solidarity tax, which refers to temporarily adding an additional tax bracket for annual earnings exceeding 100 000 euro as well as increasing the taxation of the largest inheritances and estates. Accordingly, also the taxation of large pension...