After weeks of one-on-one and full-cabinet negotiations, on August 28, 2014, the Finish Government has agreed on the 2015 budget proposal. The proposal is mainly based on decisions made in the General Government Fiscal Plan last spring and in the Government Programme in June. In the budget negotiations, the Government also agreed on a supplementary budget for 2014 and decided on strengthening the implementation of the Structural Policy Programme.
The effect of tax changes is to be only EUR300m. Lower economic growth will decrease tax revenue growth to about two percent in 2015. The aim of Income tax changes is to maintain consumers’ purchasing power, particularly for those on low or medium incomes. For this purpose the most tax changes area will be excise duties and other indirect taxes. Tobacco tax, excise duty on sweets and energy taxes are expected to increase Govt.’s tax revenue by about EUR370m, while revenue from the motor vehicle tax will be increased by EUR180m.
Central government income tax thresholds for the three lowest marginal tax rates in 2015 will be adjusted in line with inflation. The tax base will be expanded, mainly by cutting or limiting tax subsidies to companies, but the controversial power plant tax
