Taxpayers' Association predicts buying power of average income to grow 2.4 percent
Half of increase comes from lower taxes
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Jaana Kurjenoja, head economist at the Taxpayers' Association of Finland, calculates that the purchasing power of Finnish wage-earners with an average income will grow by 2.4 percent this year, or about EUR 40 a month.
The average income is calculated at about EUR 2,500 a month. The figure is based on information from Statistics Finland.
Purchasing power is defined as real income after taxes. Factors affecting purchasing power include changes in nominal income, inflation, and taxation.
The Ministry of Finance predicts that nominal income will rise by 2.5 percent this year, while inflation is predicted to be 1.3 percent.
The Taxpayers' Association calculates that half of the increase in purchasing power will come from lower taxes.
Last year's increase in nominal income was higher than what is predicted for this year, but advance figures put growth in purchasing power at 2.3 percent, which is slightly lower than the forecast for this year. In 2005 taxation of middle-income earners increased slightly, whereas it is expected to ease by 0.8 percent this year.
Tax policy that has been implemented since 1996 will have led to decreases in the taxation of middle-income-earners of nearly seven percentage points by the end of this year. The average income tax rate for 2006 is set to be 30.7 percent.
Helsingin Sanomat
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| 4.1.2006 - TODAY |
 Taxpayers' Association predicts buying power of average income to grow 2.4 percent |
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