Saturday 10/16/21
TAXES

Coronavirus crisis sinks tax revenue from Finnish companies

Tax collection from VAT also decreased, while personal income tax collection increased.

Mask-money-crisis-by-pixabay

The coronavirus crisis has also had a major impact on state revenue from tax collection in 2020.

According to figures from the latest bulletin of the Tax Administration (Vero), the preliminary figures for 2020 tax revenue have been completed. Last year, the tax authority collected 69.2 billion euros in taxes, which is 1.6% less than in 2019.

According to Markku Heikura, CEO of the Finnish tax administration, the decrease in tax revenue is "moderate."

"It looks like we survived the coronavirus year better than we feared. Last spring, taxes were clearly lower than in the spring of 2019, but the autumn went much better," Heikura says.

The crisis caused by the coronavirus had the greatest impact on the amount of taxes collected from entities. In 2020, corporate income tax paid by Finnish companies totaled 4.8 billion, which is 1.3 billion (21%) less than a year earlier.

VAT also decreased

In 2020, tax collection from VAT totaled 18.1 billion, which is 0.8 billion (4.5%) less than a year earlier.

According to Vero, this is explained by the decrease in the companies' VAT turnover and the reduced payment arrangements granted to companies in accordance with the government's subsidy measures, which enabled companies to defer the payment of taxes due in March-August 2020.

The tax administration also offered the opportunity to claim a refund of VAT paid in January, February or March 2020 as a loan.

Personal income tax

In contrast, personal income tax collection increased in 2020.

Despite the coronavirus, the amount of income tax collected from personal customers increased and amounted to 31.8 billion, which is 3.2% more than in 2019.

The amount of property tax collected decreased, due to the flexible completion of taxation and property taxes totaled 1.8 billion, which is 0.1 billion (6.2%) less than a year earlier.

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