Tax numbers being phased in for those working at construction sites
New system set up to thwart undocumented work
On Monday Ahti Kullamaa, an Estonian construction worker living in Finland, was granted a special "tax number" at the tax office on Vuorikatu in Helsinki.
Having a tax number will soon be mandatory for all those working at building sites other than those for detached houses. The new rule applies to both native Finns and immigrants, to labourers, painters, cleaners, and architects.
The regulation took effect at the beginning of the month and now applies to all new larger building sites. The number must be shown on special identity cards with a photograph. At building sites which opened in August or earlier, the new system needs to be implemented in six months.
Kullamaa would not necessarily have needed his tax number yet, as he works at a construction site for a detached house with other Estonians working for a company registered in Finland. However, the company is involved in building more than just single houses, and Kullamaa says that he is in Finland for the long haul.
On Monday, he filled a form and answered a few questions, and was given his number by Laura Lehtinen at the tax office.
The tax number system is part of the government’s efforts to fight the use of undocumented labour in the construction industry.
The number indicates that the employee has registered with the tax authorities. It is entered on both the photo-ID which must be carried at all times at the construction site, and in a public registry, where occupational safety officials, tax inspectors, labour union representatives, and also competitive businesses can easily check if the name, face, and number match up.
"After the interim period, there should be no employees at building sites who would not be known to the tax authorities", says Sari Wulff of the Finnish Tax Administration.
The tax number registry opened in early August. By Monday it contained the information of 134,000 people, 11,000 of whom were not Finnish citizens.
By the end of April, the registry is expected to contain between 150,000 and 200,000 new names. The final outcome is interesting, as it should reveal how many people actually work at construction sites.
The registry will also reveal how many foreign workers actually work in construction in Finland. Current estimates put the number at between 30,000 and 35,000, but there is no very precise information.
In addition to the new tax number system, a new regulation takes effect in October next year, under which construction companies will be required to supply tax authorities with information about their employees, and about work that they have subcontracted to other businesses.
This should improve the supervision of foreign companies and their employees. They will be required to pay taxes in Finland after spending more than six months in the country.
"When applying for a tax number, a foreign worker can say that he plans to work in Finland for, say, four months and then go back home. It would be hard to evaluate the veracity of the information without an obligation on the part of the employer to keep the authorities informed", Wulff says.
"Now the tax authorities can intervene if the name and tax number keep coming up in the employer’s report over a period of more than six months."
Previously in HS International Edition:
Estonian workers in Finland easy prey for unscrupulous employers (3.4.2012)
Construction Union says shady companies benefit from tax money (23.5.2011)
Reverse VAT planned for construction industry (20.11.2009)
Parliamentary committee wants more effective action against “grey economy” (27.1.2011)
Shady Estonian companies pose problems for Finnish builders (25.11.2009)