Tuloverojärjestelmän

The Finnish tax system, often referred to as the tuloverojärjestelmän, is a progressive system designed to fund public services. It is characterized by two main types of income tax: state income tax and municipal income tax. State income tax is levied on a progressive scale, meaning that higher earners pay a larger percentage of their income in taxes. This tax revenue is used to finance national services such as defense, social security, and education.

Municipal income tax, on the other hand, is a flat tax set by each municipality. The rate varies depending on the municipality, with the funds generated typically used to cover local services like healthcare, elder care, and primary education. Individuals are generally subject to the municipal tax rate of their place of residence.

In addition to income taxes, Finland also has value-added tax (VAT), which is applied to most goods and services. This is a consumption tax that contributes significantly to government revenue. Other taxes include property tax, capital gains tax, and inheritance tax, each serving specific fiscal purposes. The overall structure of the tuloverojärjestelmän aims to ensure a balance between revenue generation and social equity, with a focus on providing a comprehensive welfare state. The system is subject to regular review and adjustments by the Finnish government to adapt to economic conditions and societal needs.