News
The article is more than 10 years old

MPs agree to fork out extra 2.5 million euros needed to roll out child allowance cuts

Parliamentarians agreed to an additional appropriation of 2.5 million euros to implement planned cuts to child benefit allowances outlined in government’s 2015 budget. The additional funds will be used by the Finnish Tax Administration Vero to modify software to handle compensatory deductions introduced as a result of the benefit cuts.  

Vauva katselee lastenvaunun kuomun takaa.
Image: Pekka Sipilä / Yle

The additional 2.5 million euros will cover IT expenses incurred by the tax administration in managing a compensatory tax deduction meant to soften the blow of a reduction in child benefit allowances.

Government’s 2015 budget will introduce an eight-percent cut to child benefit allowances in order to save 100 million euros.

However following an outcry over the possible impact of the measure on low income and underprivileged groups the administration agreed on a child tax deduction to offset the pain of the benefit cut.

Tax administration officials say that dealing with the tax break will require modifications to 17 different types of software.

Vero said it hopes to collect sufficient data to pre-calculate the tax deduction for individual tax cards and for final tax declarations.