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Finance Ministry publishes budget proposal

The 2022 budget has a deficit of 6.7 billion euros and does not include proposals to raise income taxes.

Valtiovarainministeri Annika Saarikko
Finance Minister Annika Saariko on Friday. Image: Petteri Sopanen / Yle
  • Yle News

Finland's Finance Ministry has finalised its proposal for state spending in 2022, ahead of talks between coalition parties on the details of the package.

The final version is due to be agreed in late September, with several rounds of negotiation to complete before then.

The Ministry's proposal, which was published on Friday, includes hikes in tobacco taxes, increased tax deductions for domestic work, reduced tax breaks for diesel purchases, extra help for peat producers and more money for education.

If the proposal goes through tax deductions for household expenses, which can be cleaning, child care or other work done in the home, will rise from 2,250 euros to 3,500 euros. 60 percent of the costs will be eligible for a deduction, up from 40 percent.

The goal of the deduction is to promote service industry businesses and encourage users of those services to ask for a receipt and ensure taxes are paid on those transactions.

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Budget process in Finland.

Finance Minister Annika Saariko's (Cen) proposal includes a family leave reform to come into force from 1 August 2022, which will increase spending on paternal leave for fathers to stay home with their kids.

There is also some 65 million euros in funding set aside for the expansion of compulsory education and the decision to make secondary education entirely free of charge.

There are no income tax increases in the ministry's proposal, which has a deficit of some 6.7 billion euros. Economic growth is expected to run at 1-1.5 percent in 2022, according to the ministry.

Talks between Saarikko and individual ministers will now follow as the government thrashes out the details, followed by broader discussions between government parties and a final budget in late September.

The Greens and the Left Alliance have demanded additional measures to combat climate change, with Saarikko's Centre Party likely to oppose some of their requests.