On 20 September 2012 it was reported that the Finnish finance ministry has recently published the country’s 2013 budget review, detailing the government’s tax plans for next year.
The government plans to implement tough tax measures to strengthen the public finances. The most significant tax policy measures adopted in the budget proposal are to abolish adjustments for inflation for earnings levels in earned income taxation and to raise all value-added tax (VAT) rates by 1%.
Solidarity taxes will be introduced as a means to improve the fairness of taxation. A temporary bracket will be introduced into the income tax scales, namely a 31.75% rate on annual taxable income in excess of EUR100,000 (USD130,000). Moreover, taxes on large inheritances and large pension income will be made tougher while taxes on low income will be eased by raising the earned income deduction and the basic deduction in local taxation. In addition, a bank levy will be introduced.
