Finland Times

Prime Minister Juha Sipilä, Finance Minister Alexander Stubb and Justice and Labour Minister Jari Lindström made the announcement at a press conference in the afternoon.

The tax cuts will be implemented immediately in the next year’s budget. The extent of tax cuts will depend on the coverage of the competitiveness package.

The tax cuts would in principle amount to 350 million euros.

However, if the coverage of the competitiveness package exceeds 85 per cent, the tax cuts would rise to 415 million euros, and 515 million euros if the coverage of the package is more than 90 per cent.

As a result of implementation of competitiveness package, the employees’ social insurance contributions will increase, and therefore, the government intends to offset the rise through tax cuts.

“I believe that this, our answer, is a bit positive than what the organisation had expected,” Sipilä told the press conference.

Initially, the government had spoken about a billion euros in tax cuts. 

Now, the government said it is exploring the possibility to extend tax cuts on the basis of economic development for the years 2018-2019.

It is to be seen whether the government’s move would make sectors outside the competitiveness agreement negotiations abide by the collective agreement under the new competitiveness deal.

The government also promised to scrap the coercive legislative measures and implementing further austerity measures, if the competitiveness agreement is put into practice.

Finance Minister Alexander Stubb emphasised that the government would maintain in principle that no one’s taxes would be raised.

According to Stubb, the cuts would be carried out evenly in all income groups.