Finland's general value-added tax (VAT) rate rose to 25.5 percent on Sunday, up from 24 percent.
Most products and services are subject to the general rate.
The VAT increase was one of the austerity measures decided by the government in its spring budget session. Sunday's VAT hike is expected to generate around one billion euros in tax revenue annually for the state.
The move has been criticised widely, with a report by Statistics Finland noting that the hike will negatively impact lower-income earners.
While the general VAT rate has risen, the government intends to keep the rate of VAT on other food products, as well as restaurant meals at 14 percent, and will also make no change to the 10 percent rate on medicine, accommodation, books and cultural events.
The government has, however, planned further VAT increases for next year. For instance, the VAT on sweets and chocolate is set to rise sharply from 14 percent to 25.5 percent, as these items will become subject to general VAT.
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