The Finnish Innovation Fund Sitra has urged the next government to embark on a comprehensive tax reform in an attempt to reduce emissions.
Sitra on Monday stated that the need to shift the focus of taxation away from labour and entrepreneurship towards environmental impacts arises from the much-discussed report published earlier yesterday by the UN Intergovernmental Panel on Climate Change (IPCC).
“The additional revenues generated by higher emission, consumption and resource taxes can be allocated by means of income and corporate tax cuts to support employment and cost competitiveness,” says Saara Tamminen, a leading climate solutions specialist at Sitra.
The government, she says, should also consider introducing lump-sum returns to low-income households most affected by the tax hikes and new subsidies for research and development efforts that reduce emissions further.
“This sort of a tax shift can be used to support employment, cost competitiveness and economic growth and, simultaneously, reduce emissions. We need a tax reform urgently, as soon as during the next electoral term, and it should be considerably broader than the previous reform attempts,” outlines Tamminen.
Aleksi Teivainen – HT
Source: Uusi Suomi