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Published: 13 July 2006

Tax ratio went up slightly in 2005

According to data calculated by Statistics Finland, the ratio of the taxes and compulsory social security contributions collected by general government to gross domestic product was 43.9 per cent in 2005. One year earlier, the ratio was 0.3 percentage points lower. The total accrual of taxes and compulsory social security contributions went up by 4.3 per cent from the previous year and was EUR 69.1 billion. The net tax ratio, i.e. the tax ratio less public current and capital transfers and subsidies received by the private sector, went up by 0.4 percentage points to 21.6 per cent.

The tax revenue of the state increased by 3.7 per cent from the previous year. Strengthened consumption and investment demand put revenue from value-added tax up by 6.0 per cent to EUR 13.7 billion. Municipalities' tax revenue grew faster than the state's, or by 4.0 per cent. Several revisions were made to the basis for collecting income tax in 2005, e.g. the system of avoir fiscal was abandoned in the taxation of dividends, and the corporate income tax and capital gains tax rates were lowered. The total combined income tax revenue of the state and municipalities went up by 3.6 per cent.

The collected amount of compulsory social security contributions was 5.7 per cent higher than in the year before. Their total accrual went up to EUR 18.8 billion.

The tax ratio for 2005 has here been calculated for the first from the revised time series of national accounts.

Taxes and compulsory social security contributions by receiving sector

	1998	1999	2000	2001	2002	2003	2004*	2005*
	EUR million
Total	53,950	56,159	62,418	62,334	64,186	64,187	66,191	69,062
State	28,488	29,577	34,310	32,928	34,667	34,824	35,966	37,290
- Income and property tax	9,752	10,036	13,973	12,098	12,676	11,806	12,319	12,749
- Value-added tax	9,700	10,137	10,869	11,118	11,680	12,455	12,949	13,720
Municipalities	11,767	12,193	13,484	13,807	13,773	13,538	13,778	14,328
Social security funds	13,542	14,246	14,486	15,473	15,640	15,721	16,317	17,290
European Union	153	142	139	127	106	104	130	154
	Relative to GDP, %
Total	46.1	45.8	47.2	44.6	44.6	44.0	43.6	43.9
State	24.3	24.1	25.9	23.5	24.1	23.9	23.7	23.7
- Income and property tax	8.3	8.2	10.6	8.6	8.8	8.1	8.1	8.1
- Value-added tax	8.3	8.3	8.2	7.9	8.1	8.5	8.5	8.7
Municipalities	10.0	9.9	10.2	9.9	9.6	9.3	9.1	9.1
Social security funds	11.6	11.6	11.0	11.1	10.9	10.8	10.7	11.0
European Union	0.1	0.1	0.1	0.1	0.1	0.1	0.1	0.1

* = preliminary data

Source: Taxes and tax-like payments 2005. Statistics Finland

Inquiries: Mr Mika Sainio +358 9 1734 2686, skt.95@stat.fi

Director in charge: Mr Ari Tyrkkö

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Last updated 13.7.2006