Finland could rake in more than one billion euros in extra tax revenue by clamping down on dozens of tax law loopholes, according to a new report from the NGO Finnwatch.
"Our tax system is full of loopholes that are chiefly used by corporations and their wealthy high-earning owners. Our report is a reminder that it would be possible to collect significantly more just by ensuring that everyone pays the same tax for the same income," Finnwatch tax expert Saara Hietanen said in a press release.
The NGO's report listed more than 40 areas that it said needs addressing, including issues concering tax revenue, corporate taxation, as well as dividend taxation for unlisted firms. The report also pointed to problems with interest deduction loopholes, and what it called a "toothless" law that should be preventing companies from strategic tax avoidance planning.
Additionally, it noted unfavourable tax treaties, tax-delaying investment instruments and clauses in inheritance laws that offer tax relief when family fortunes change hands.
Hietanen suggested that the government will be making a number of value-based decisions as it tries to put the state's finances in order, noting that — if Finland fixed and enforced tax rules — the state could gain more than a billion additional euros per year.
Transparency issues
The report criticised what it characterised as a lack of corporate tax transparency in Finland. Unlike in other countries, it said, Finnish courts do not publish the names of companies involved in court decisions. It added that use of the Finnish Trade Register, which among other things keeps track of company ownership matters in an aim to prevent tax avoidance, was very limited.
"In Finland, we often imagine that we are a model country regarding tax information transparency. This is not true. Lack of transparency perpetuates the defects in the tax system," Hietanen said.
The group said that taxation was a human rights issue.
"Human rights organisations have called for states to implement progressive taxation policies and a broad tax base. It would be good that those things are remembered in Finland, as state budget decisions are being made," Hietanen said in the release.
Prime Minister Petteri Orpo's (NCP) coalition government is gearing up to hammer out next year's budget, a process which starts next week.
The Finance Ministry has said that the state needs to reduce deficits by nearly three billion euros over three years.
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