Parliament reluctant to start checking receipts for MPs’ expenses

Current system regarded as favourable for taxpayers

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The Members of Parliament and some of its top officials oppose plans to start auditing all receipts which entitle MPs’ to claim tax-free expense allowances.
      According to Pertti Rosila, the Head of the Parliament Accounts Office, and to Seppo Tiitinen, the Secretary General of Parliament, the reform would lead to an excessive growth in overall workload and bureaucracy.
     
At present, MPs are paid a lump sum reimbursement for their expenses, regardless of their actual travel and lodging costs. A typical monthly expense allowance varies between EUR 987 and EUR 1,809, depending on where the MP lives.
      Rosila says that if a new system were introduced, the Accounts Office would have to handle tens of thousands of receipts, monthly rents, and all related costs.
      Moreover, Rosila says that the present system is very advantageous to tax-payers, as the present reimbursement based on the place of residence does not cover any extravagant standard of housing.
     
Parliament's Administrative Department examines the justification of MPs’ travel expenses every now and then. At present, no such examination is under way.
      According to Rosila, MPs do not act in an immoral way.
      ”For example Paula Lehtomäki (Centre) and Jyrki Katainen (National Coalition) are paid the highest expense allowance, as they live outside of the province of Uusimaa and have two homes. They receive EUR 247 per month for the maintenance of the second home. What kind of a home do they get at this price?” Rosila asks.
      ”A system of receipts would increase the amount of bureaucracy and the number of personnel, when our goal is to cut the number of staff”, Secretary General Seppo Tiitinen argues.
     
Tiitinen says that there are three facts which one should remember when talking about MPs’ expense allowances.
      First, MPs are reimbursed for not getting any daily allowance, which is normally paid to people who have to travel on business.
      Secondly, they are entitled to request reimbursement for expenses incurred while maintaining two residences in two locations.
      Thirdly, they are reimbursed for work-related ”hospitality” and travelling in their constituency.
      MPs are entitled to an expense allowance even if they left their Helsinki residence only occasionally in order to visit their original places of residence.
     
Rosila reports that in 1986 the current system replaced the daily allowances, the 10% tax deduction without receipts, as well as double salaries.
      In other words, a MP is now no longer entitled to get paid for a job he or she has taken leave from.
      Rosila notes further that MPs are not entitled to any tax deductions on a non-primary residence. However, they might be granted a loan interest tax deduction if they buy a second home in the capital area, provided that the primary residence is more than 100 kilometres away.
     
On the other hand, MP Ilkka Kantola (SDP) sees the present system as ”morally stressful but not too bureaucratic”.
      Kantola is officially resident in Turku, where he owns an apartment. However, he and his wife mostly live in a rental apartment in Helsinki. Nevertheless, Kantola receives the highest expense allowance of EUR 1,809.
      Around ten MPs in Parliament are paid the highest expense allowance based on their normal place of residence, even though their families or spouses in practice live in the Greater Helsinki area.
     
     
FACTFILE: Three categories of expense allowances
     
An MP is entitled to a tax-free expense allowance of EUR 987 per month if he or she lives in the Greater Helsinki area.
     
EUR 1,315.75 per month if he or she lives more than 30 kilometres away from Parliament and has no second residence in the capital area.
     
EUR 1,809.15 per month if he or she lives outside the provice of Uusimaa and has a second home in the Greater Helsinki area.


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