54% of companies hope for tax reductions by the government to improve Finland's competitiveness and employment rates, according to a survey by the Chambers of Commerce. In addition to increasing local agreement, tax reduction was seen as the most popular option to improve Finland's competitiveness and employment rates. When asked which tax reduction would help companies the most, 71% of companies responded that reducing labor taxes would. The survey received responses from 1560 Chamber of Commerce member companies.
According to the survey, companies also viewed increased local agreement (45%) and investments in skills and training (39%) as important measures to improve competitiveness and employment rates in Finland. The survey allowed companies to select their top three choices.
Companies expect the government to increase job-related immigration (31%), streamline licensing processes (28%), invest in transportation routes (28%), and invest in energy production and green transitions (27%) to improve competitiveness and employment rates.
"A competitive economy arises when the labor market is functioning, taxation is encouraging, and work is always profitable for those working and those outside of work. This is the case in Sweden and Denmark, for example, where public finances have been taken care of. There, the labor market and income and social security encourage work. Finland has fallen far behind, but the incoming government has the opportunity to rectify this," says Juho Romakkaniemi, CEO of the Central Chamber of Commerce.
In the Chambers of Commerce survey, reducing labor taxes was the most popular tax reduction method. 71% of companies would reduce labor taxes. Companies were allowed to choose their three most important taxes for reduction. Alongside reducing labor taxes, reducing corporate taxes (45%) and reducing value-added taxes (37%) were seen as important. Around 14% of respondents believed that taxes should not be reduced at all.
According to Romakkaniemi, the incoming government must bring Finland back to the Nordic labor line, where a competitive economy is not stifled by harsh labor taxes.
"In Finland, labor taxation is among the most progressive in the world, creating income traps and weakening work incentives. Tight labor taxation stifles our competitiveness. The corporate tax system must remain internationally competitive, and this requires a reduction in labor taxation. Companies also see that reducing labor taxes is more important than directly reducing taxes related to corporate operations," says Romakkaniemi.
According to the Chambers of Commerce, reducing labor taxes should be implemented as part of a green tax reform so that the taxation focus is shifted from labor taxes to consumption and environmental taxes.