Tax revenue grows by 8.7% in 2021

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Tax revenue grows by 8.7% in 2021

The accrual of taxes and compulsory social security contributions grew by 8.7 per cent in 2021, according to Statistics Finland.

Part of the growth is caused by the lower than usual figures in the comparison year 2020 due to the corona pandemic.

The total accrual amounted to EUR 108.3 billion. The tax ratio grew from the previous year by 0.9 percentage points to 42.8 per cent.

In 2021, the net tax ratio was 17.4 per cent of gross domestic product, up by 2.0 percentage points from the previous year. The number of current transfers was still higher than before the corona pandemic, so the net tax ratio was lower than in the years preceding 2020.

The value added tax revenue grew by 7.0 per cent from the previous year and was EUR 23.6 billion.

The revenue of other taxes paid on goods and services decreased by 0.5 per cent, the most significant of which measured in euros were car and motorcycle tax, the revenue of which was EUR 515 million, down by 27.8 per cent from the year before.

The revenue from lottery tax decreased by 57.7 per cent due to the lowering of the tax rate and was only EUR 69 million.

The revenue from vehicle tax, EUR 1.1 billion, was 2.9 per cent lower than one year earlier.

Of increased taxes it was mentioned the revenue from central government's share of Oy Veikkaus Ab's profit, which grew by 9.8 per cent and amounted to EUR 819 million, but did not return to the level prior to the corona pandemic.

The group of other taxes paid on goods and services also includes excise duties.

From the beginning of 2021 they were transferred to the payment schedule of self-assessed taxes, whereby the figures in the March release are based on a prediction for the last month. The revenues of the most significant excise duties – energy taxes EUR 4.3 billion, alcohol tax EUR 1.5 billion and tobacco tax EUR 1.1 billion – are at this accuracy level the same as in 2020. The change percentages will be discussed further in the September release.

The revenue from income tax paid by households grew by 8.0 per cent from the previous year and amounted to EUR 32.3 billion. The revenue from income tax paid by corporations grew by as much as 30.6 per cent and amounted to EUR 6.6 billion. The revenue from taxes on property grew by 6.1 per cent. In 2021, the revenue from inheritance and gift tax was EUR 826 million, which was 3.6 per cent higher than in 2020. The revenue from asset transfer tax was EUR 1.0 billion and it grew by 21.9 per cent from one year before.

EUR 270 million collected as contributions to the Single Resolution Fund from credit institutions was recorded as tax revenue for the institutions of the European Union. Customs duties accounted to the EU amounted to EUR 205 million.

In 2021, the tax revenue of central government totalled EUR 51.8 billion. The growth from the year before amounted to 9.5 per cent. The tax revenue of local government totalled EUR 25.8 billion and it grew by 4.8 per cent.

Most of local government tax revenue comes from households' income taxes, which are divided among tax recipients by various tax scales of state income tax and municipal tax and the share of capital income tax. The revenue of corporation tax grew in both sectors, and the central government's tax revenue was boosted significantly by value added tax mentioned above.

The revenue of compulsory social security contributions of social security funds grew by 10.7 per cent and the contributions totalled EUR 30.3 billion. Healthcare fee for students in higher education (EUR 19 million) introduced at the beginning of 2021 was added to the other social security contributions of insured persons.

The proportion of taxes and statutory social security contributions in consolidated total general government revenue was 81.4 per cent in 2021.

Source: www.dailyfinland.fi

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