The 800 million euro reduction to corporate taxes that came into effect in early 2014 has not brought about the desired economic growth, according to economist Petri Malinen from the Federation of Finnish Enterprises (FFE).
“The so-called dynamic effects to our economy that were hoped for simply did not come to pass,” Malinen says. “The reduction could not have alleviated the downward trends in the global economy, and that is the thing keeping Finland down, as well.”
In March, 2013 Finland’s government decided to reduce the corporate tax down to just 20 percent, which was lower than in neighbouring Sweden. Then-Minister of Finance, Jutta Urpilainen announced that the change would bring about a booster effect in companies and more jobs for everyone.
The tax reduction, calculated at 900 million euros, was expected to deliver at least half of that in unspecified ”dynamic effects” or vitalising returns. In reality, no such effects came about. And the tune is not about to change, Malinen says.
“The FFE will be releasing a new barometer which shows that businesses in the capital region have lost faith in promised growth, so I would say there is next to no hope of next year being any better in terms of economic development,” he says.
The government, for its part, estimates only a small rise in returns from corporate taxation in 2015.