With the exception of employment, the Finland Budget 2012 will look to maintain the present levels of domestic demand and the buying power of families across the country.
Finland Budget 2012 Highlights and Impact:
The Law on Withholding Tax on Expatriates will include the employment sector as well from 2012-15. As per this law eligible overseas executives and specialists can apply for their salaries to be subjected to flat tax rates instead of the progressive income taxes.
The credits provided on income will be increased from 740 Euros to 900 Euros. The percentage applicable for credit calculation will be taken from 5.9 percent to 6.9 percent.
The upper limit for small income relief will go up from 2,250 Euros to 2,850 Euros.
From 2012 onwards capital income will be subjected to progressive taxation; income amounting to 50,000 Euros will be taxed at 30 percent and the amount more than that will be taxed at 32 percent. At present 28 percent is applicable for all income brackets.
The yearly tax exemption provided to dividends of non-listed enterprises will be brought down from 90,000 Euros to 60,000 Euros in 2012.
The credit for charitable donations, which are provided to the universities, will continue in 2012 fiscal.
The yearly maximum credit that is applicable for salaries of home care personnel and domestic staff will be brought down from 3000 Euros to 2000 Euros.
The percentage for creditable remuneration will be decreased from 60 and 30 percent to 45 and 15 percent. This will depend on the salaries.
1,394.2 million euros have been allotted at the draft Finland budget for 2012.
211 million euros have been set apart to meet operational expenses. 4 million euros will be spent for improving the management of developmental programs.
21 FTEs will be added in order to better the output and impact of Finland s administrative divisions. This personnel addition will be allotted for immigration management and reinforcing the way developmental assistance processes are managed.
56.3 million euros have been assigned to crisis management troops of Finland. 18.9 million of this amount will come from Finland s civilians. 1 million euros from this contribution will be used for peacekeeping activities.
It is calculated that in 2012 fiscal 650 people will be employed in civilian and military crises management services.
13.5 million have been proposed for cross-border expenses.
The Finnish government will look to prioritize nuclear safety, prevention of communicable diseases and environmental improvement as part of the Government Program.
The deductions in expenses that have been suggested in the Government Programs will be effected in a phased manner throughout the period under consideration in the budget.
In 2012 the central government will be spending 1,201 million, which will amount to 0.59 percent of the Gross National Income (GNI). Finland will look to take it to 0.7% in 2015. In order to achieve this aim, the European country will need to increase their expenses by approximately 0.036 percent from 2013 to 2015.
While attending the 15th Conference of the Parties or UN Framework Convention on Climate Change, Finland had opted to provide 110 million euros towards the short term financial assistance to be provided by European Union from 2010-12. Finland will now finance this by increasing developmental programs. As per the 2012 budget 41.6 million will be provided for climate change funding on a short term basis.
964 million euros will be spent for developmental activities. This will comprise 4.3 million for meeting the expenses of international collaborations.
20 million euros will be allotted to Finnish Fund for Industrial Cooperation or Finfund.
84.1 million euros are expected to be spent for fiscal contributions and membership fees.
Subscriptions to periodicals and newspapers will be subjected to VAT of 9 percent in 2012. Presently VAT is not applied to them but only in case the subscription is more than a month.
The rate for lottery taxes to be imposed on gross profits earned by operators through different offers will be increased from 10 percent to 12 percent.
Excise taxes on beer will go up by 15 percent while the excise taxes for other beverages will be 10 percent.
The excise taxes on ice cream and sweets will be increased to 0.95 per 2.2 pounds from the present rate of 0.75. An exclusive sugar tax could be introduced.
An excise duty of 0.11 euro will be imposed on per liter of soft drinks from 2012 onwards. At present the rate is 0.075.
Excise duty for diesel oil will be increased by 0.026 euro per liter and for gasoline the increase will be 0.023.
Minimum and maximum car taxes will be changed from 12.2 and 48.8 percent to 5 and 50 percent. This will be effective from 1st April 2012. The addition, though, will be applicable for a few vans and passenger cars only.
Yearly motor vehicle taxes will be altered from 23 and 92 to 43 and 606 from 1st January 2012.