Finland Times

The coalition government led by Jyrki Ktainen on Thursday decided to review the dividend tax proposal to reach a solution on the issue.

 

Prime Minister Ktainen admitted that the first model of the dividend taxation placed before parliament in the budget proposal had some defects that he had not agreed with earlier.

 

The revised model of dividend taxation will be applicable for both listed and unlisted companies, said Katainen.

 

Defense Minister Carl Haglund (left), Minister for Culture of Left Alliance leader Paavo Arhinmäki, Prime Minister Jyrki Katainen, finance minister Jutta Urpilainen and Green Environment Ville Niinistö (right) talking to the journalists in the parliament on the dividend tax reform on Thursday. Photo Lehtikuva

He, however, said the basic principles of the dividend tax would remain almost the same and for unlisted companies it would be staggered. For listed companies, a maximum of 85 per cent of the dividend can be marked as capital gain. So its difference from the previously assumed 100 per cent is not that high.

 

Immediately after the review decision, Minister for Culture and Left Alliance leader Paavo Arhinmäki criticised the move.

 

He said thousands of shareholders would receive the dividend tax which would be distributed for public welfare spendings, but the rate was as low as 85 per cent which was less than the previously assumed 100 per cent.

 

The Federation of Finnish Chambers said the change would have a serious impact on businesses and industries.

 

The chief executive officer of the federation, Jussi Järventaunen, said the revision of the dividend tax proposal would be of little help.

 

Confederation of Finnish Industries leaders also termed the move disappointing as a large number of companies were unlisted artificially.

 

They also said that the EUR 150,000 limit was against the economic doctrine.

 

Denmark's Queen Margrethe II (left) received the President, Sauli Niinistö baroque Fredensborg Castle on Thursday. The President on a state visit to Denmark. Photo Lehtikuva

Earlier on Thursday, President Sauli Niinistö indirectly criticised the government decision regarding the dividend tax proposal placed before parliament on March 21 during the budget session.

 

“If it goes like this then surely I know what I have to speak about it in the next New Year’s speech,” the president told a press conference. He is now on a visit in Denmark.

 

In his last New Year’s address, the president emphasised the sense of justice and urged the people to think if they could waive some of the benefits they received.

 

Just before the revision decision was taken in Finland, the president, while speaking on the spending limit issue, commented that the government decision in this regard created confusion.

 

Niinistö said things had been thickened. In his opinion, the Board activities of the government required clarification. That is why he expected that the arising ambiguities could make way for a discussion to make the issue clear.