Finland’s Parliament has approved the 2025 budget on 20 December 2025.
The Finance Committee’s proposal for the state budget for 2025 is approximately EUR 89.2 billion, which is about EUR 1.3 billion more than the actual budget for 2024. The increase in appropriations is explained by, among other things, the retrospective adjustment of funding for wellbeing services counties and index adjustments. On the other hand, government reforms and spending cuts reduce the level of expenditure.
The state’s budgetary revenues, excluding net borrowing, are estimated to be around EUR 76.7 billion, of which tax revenues are approximately EUR 67.2 billion.
The goal of tax policy is to improve purchasing power, enhance work incentives, and strengthen the conditions for economic growth.
The state budget is approximately EUR 12.5 billion in deficit, which will be covered by borrowing.
The Finance Committee has increased the budget expenditures by EUR 50 million, which will be allocated to, among other things, reducing the repair debt of transport routes, strengthening national defence and overall security, enhancing skills, and promoting outdoor activities and nature recreation.
The key tax provisions proposed in the 2025 budget are plans to raise the reduced tax rate from 10% to 14%, excluding newspapers, magazines, and broadcasting, while lowering the tax rate for menstrual products and children’s diapers. Alcohol tax will rise by 4.6% from 2025-2027. Vehicle taxes for electric and hybrid cars will also see annual increases.
This development follows after Finland’s Ministry of Finance submitted its proposal for the 2025 budget and other related legislative proposals to the Parliament on 23 September 2024. At the end of the budget consideration, a vote of confidence was held in the Government. The Government enjoyed the confidence of Parliament by a vote of 97-70.