Finance Ministry official Raimo Sailas warns of sharp increases in municipal taxes
"Changes required by age structure and migration have been made too slowly"
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"There will be no more cuts in the taxation of wage-earners' income during the present Parliamentary term", says Raimo Sailas, Secretary of State at the Ministry of Finance.
According to Sailas, the key question concerning income taxes during the remainder of the term is what will happen to municipal taxation.
"If local authorities do not rapidly initiate the necessary reforms, there will be no limit to the rise in municipal taxes", Sailas warns.
Next year the average municipal income tax rate is rising from 18.12% to 18.30%.
Sailas points out that in some communities, the municipal income tax rate has exceeded 20%, which was long considered something of a mystical threshold.
The increase in municipal spending was partly attributed to obligations imposed on local authorities by the state, but in Sailas' view, it is also partly because the municipalities are not reacting quickly enough to needed reforms.
In light of the changing age structure, Sailas feels that Finland has too many schools. He believes that new municipal councils have too many populist defenders of unviable neighbourhood schools and other local pet projects.
The present government is committed to tax cuts which exceed the ones recommended by a working group headed by Sailas in the spring of 2003.
He laments that the tax cuts have been implemented without the extensive structural changes needed to increase employment.
Helsingin Sanomat
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| 20.12.2004 - TODAY |
 Finance Ministry official Raimo Sailas warns of sharp increases in municipal taxes |
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