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Which Finnish municipalities will raise and which will reduce tax rates in 2020?

Finnish residents are liable for municipal tax if their annual income exceeds 15,700 euros
  • 29 novembre 2019 09:30
  • Author Monika Dimitrova
Medium money

According to the Association of Finnish Local and Regional Authorities (Kuntaliitto) a big part of the municipalities across the country have decided to raise their tax rates starting next year.

These include the largest regional centres such as Tampere, Kuopio, Vaasa and Kouvola. The municipalities have a total population of around 1.1 million, which is the highest number of people affected by municipal tax hikes since 2014.

Another seven more municipalities have raised their tax rates for 2019. Now, even though the number of municipalities doing the raising is lower than expected, these actions will affect twice as many municipal residents as last year.

No more than seven municipalities will contrastively reduce their municipal tax rates - the nearly 78,000 people living there will certainly be celebrating these news. At the same time, approximately 4.4 million people living in the remaining 250 municipalities will see no change in their municipal tax rate in 2020.

193 municipalities to have a tax rate of at least 21%  

In 2020 Halsua will have the highest tax rate of 23.5% while the lowest will be in Kainuainen - 17%. Until now, no Finnish municipality has previously levied a tax rate of over 23% from its residents. According to Kuntaliitto, the tax increases are relatively modest and are in accordance with the financial situation of many municipalities across the country.

These measures are yet another indication of tax increases being the absolute last resort to balance municipal finances. Several municipalities are taking action to adjust by, for instance, launching broad consultative discussions.

Finnish residents are liable for municipal tax if their annual income is at least 15,700 euros or if their annual pension income is over 11,500 euros. Around 40% of the Finns with taxable earnings do not pay municipal taxes in the country.

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