Intermediate Report Of The Taxation Development Working Group

The taxation working group, appointed by the Ministry of Finance and led by Mr. Hetemäki, has in its intermediate report (35/2010) proposed key changes to taxation. The main themes of the intermediate report are widening the tax base, lightening the taxation of work and shift of focus from direct taxes to consumption taxes. The focus of income tax is proposed to be slightly shifted from taxation of corporate earnings to taxation of personal capital income. The key points of the working group report are presented in brief in the following.

Taxation of personal income

The working group proposes the taxation of earned income be lightened as regards marginal rates. The highest marginal tax is to be reduced to approximately 50 per cent. Correspondingly the tax rate of capital income is proposed to be increased from 28 per cent to 30 per cent. The working group does not propose changes to the tax base of capital income.