Reports from the House of the Estates suggest the next government is planning on cutting the tax credit for household expenses. (Kosti Keistinen – Office of the Prime Minister of Finland)

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A REPORT by YLE that the five parties ironing out the final details of the next government programme have agree do slash the tax credit for household expenses has raised eyebrows among policy makers and business advocacy groups.

Capped at 2,400 euros, the credit has been granted for expenses arising from cleaning, child care, renovation and other types of household work.

Reports from the House of the Estates suggest some are eager to slash the tax credit for household expenses. It has been an effective way to rein in the shadow economy, but it has also created plenty of jobs and companies in this country,” tweeted Timo Heinonen (NCP). “The Centre, is it true that you’re giving in to this?”

Tarja Pöyhönen, the operating officer at the Enterprise Centre for New Businesses in the Kuopio Region, similarly called attention to the positive employment impact of the tax credit, saying it has had increased both the workload and profitability of companies providing home services.

“I met a home service provider who had been in business for less than a year and who bashfully admitted to having hired five employees because of the amount of work,” she told.

Their concerns were echoed by Juho Romakkaniemi, the CEO at Finland Chamber of Commerce. Romakkaniemi on Thursday voiced his bafflement at why the government is intent on kicking off its term in office by reducing employment and increasing shadow-economy activity.

“Keeping in mind the employment rate target of 75 per cent, it should do the opposite and increase [the tax credit],” he commented.

Cutting the tax credit is a bad idea, retorted Teemu Lehtinen, the managing director at the Taxpayers’ Association of Finland.

“Dissolving the shadow economy and increasing employment are among the positive things that the tax credit for household expenses is promoting,” he said.

Aleksi Teivainen – HT
Source: Uusi Suomi