The Finnish government has decided to withdraw its bill to relieve microbusinesses of the obligation to keep accounting records following crushing feedback from experts and stakeholders, including the National Police Board and Finnish Tax Administration.
The bill was criticised particularly for possibly undermining the credibility of financial information and increasing shadow economy activities.
The National Police Board, for example, highlighted in its statement that the bill would contradict the government’s action plan to tackle the shadow economy and economic crime.
“Corruption in Finland is largely a hidden crime and only a fraction of corruption is reported to authorities. Even though auditing is a retroactive form of monitoring, an audit can expose otherwise hidden cases of corruption,” its statement read.
The bill would have relieved an estimated 37,000 limited companies and partnerships from the obligation to keep accounting records, reducing the number of listed companies with the obligation to roughly 25,000 and that of partnerships with the obligation to roughly 1,000.
“If you also take into consideration the fact that roughly 53,000 limited companies and the majority of partnerships were relieved [of the obligation] in 2007, the statutory obligation to keep accounting records would apply to fewer than 10 per cent of limited companies and three per cent of partnerships,” said the National Police Board.
Jari Lindström (BR), the Minister of Employment, on Friday conceded there is no justification for proceeding with the proposal as the criticism it has faced arises from warranted concerns. He added, however, that the current situation is not ideal as a traditional audit is typically a needlessly excessive procedure for small businesses.
“The possibility of establishing a lighter audit procedure was floated in several of the statements as an alternative to the current obligation,” said Lindström.
The Ministry of Employment and the Economy will duly appoint a task force to explore the possibility of establishing a lighter auditing procedure for small businesses, according to its press release.
Aleksi Teivainen – HT
Source: Uusi Suomi