Taxes Finland’s tax base grew by more than 9 percent last year: “The economic situation was very good”

Despite the corona situation, companies and individuals managed to increase their income last year, the Tax Administration says.

Tax Administration taxes collected clearly increased last year due to the good economic situation.

According to preliminary figures released by the tax administration on Thursday, the agency collected € 75.6 billion in taxes last year, up 9.2 percent from a year earlier and up 7.5 percent from 2019.

The increase in tax revenue shows that despite the corona situation, companies and individuals managed to increase their income last year. Tax development is most affected by what the economy develops.

“Preliminary figures show that the economic situation was very good in 2021, despite the corona situation. In 2021, taxation as a whole did not tighten, which would explain the increase in tax revenue,” says the CEO of the Tax Administration. Markku Heikura in the bulletin.

According to data collected by the Finnish Financial Services Association, the Finnish economy is forecast to have grown by at least three per cent last year. The most positive of the forecasters is Nordea, which estimates that gross domestic product (GDP) grew by 3.8 per cent last year. In 2020, GDP fell by 2.8 percent.

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In euros income tax, VAT and corporate tax revenues increased the most. Last year, VAT was collected in the amount of EUR 1.9 billion, or 10.6 per cent more than in 2020.

The increase in personal income tax was EUR 1.9 billion, or 5.9 per cent, and the corporate income tax was EUR 1.8 billion, or 38.1 per cent.

The high growth rates of VAT and corporate tax are largely explained by the weak accruals of the comparison year, ie 2020, the Tax Administration says.

VAT was also inflated by the fact that consumers have confidence in the economy and a desire to spend the money saved during the interest rate crisis.

Remember Of the tax types, the amount of tax euros collected from withholding taxes increased the most. Last year, a total of EUR 1.1 billion was collected in withholding tax, which is 718 million or almost 180 per cent more than in 2020.

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Most of the withholding tax is collected on dividends paid by companies to their shareholders. Dividends were on the rise last year as the European Central Bank lifted its ban on dividends due to the interest rate crisis.

Based on the tax collection figures, the exact amounts of income taxes for personal customers and entities in the tax year 2021 are not yet known. The amounts will be specified in the spring when companies and individuals file their tax returns and taxation is completed.

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