Government agreed on spending limits: strong emphasis on growth, employment, justice and stability
The original more comprehensive press release published in Finnish on 21 March 2013
On 21 March 2013, the Government reached agreement on central government spending limits for 2014-2017. The Government emphasises that the solution to the challenges in public finances lies in economic growth and new jobs. Finland's economic success is based, also in the future, on high employment, competitive production, highly-skilled workforce, delivery of welfare services on an equal basis and a welfare model based on social justice and participation.
Debt and balance in central government finances
The measures now decided are to turn the increase in the debt ratio into a decline at the end of the electoral term. The amount of the net adjustment will amount to around EUR 600 million in 2015.
The central government revenue base will be strengthened by increasing the excise dutions on products with adverse health effects, such as alcohol, tobacco, sweets and soft drinks. The tax reform also aims at significant health benefits. The Government will not change the VAT rate. The taxation on capital income and dividends received from companies will be increased while some tax subsidies for companies will be removed. The reform of the taxation stucture is geared to promote investments, streamline the taxation system, ease the administrative burden and eliminate potentially adverse tax planning. In addition, the progression limit of the capital income taxation will be lowered from EUR 50,000 to EUR 40,000. Changes in corporate and capital income taxation will curtail income disparities.