Tax revenue grows by 3.3% in 2016

The accrual of taxes and compulsory social security contributions grew by 3.3 per cent in the country in 2016, according to Statistics Finland.

The total accrual amounted to EUR 95.2 billion. The tax ratio grew from the previous year by 0.2 percentage points to 44.1 per cent.

The tax ratio describes the ratio of taxes and compulsory social security contributions to gross domestic product.

The tax ratio for 2016 went down by 0.2 percentage points mainly because GDP became revised from the preliminary data released in March. These data are based on the revised national accounts data for 2016.

Other social security contributions than employment pension contributions paid by employers and the insured and grew particularly in 2016.

The growth was especially due to increases in unemployment insurance contributions made in 2016.

The accrual from other social security contributions paid by employers grew by 14.2 per cent and totalled EUR 3.8 billion.

The revenue from other social security contributions paid by the insured increased by 17.7 per cent and totalled EUR 2.9 billion.

The value added tax revenue grew by 3.8 per cent and was EUR 19.7 billion. The income tax paid by corporations rose by 5.5 per cent and totalled EUR 4.8 billion.

The comparison takes into consideration that the church tax for corporations was removed in 2016 and it is from then on included in the revenue from the income tax paid by corporations.

The income tax paid by households rose by 1.2 per cent and totalled EUR 28.0 billion.

The revenue from energy taxes grew by 8.7 per cent to EUR 4.4 billion. In addition, the accrual from the vehicle tax, tobacco tax, employment pension contributions paid by employers and the insured, vehicle and motorcycle tax, and capital transfer tax, for example, grew in 2016. The revenue from only a few taxes decreased. For instance, the accrual from death duty and gift tax contracted by 17.3 per cent to EUR 522 million.

EUR 112 million collected as contributions to the Resolution Fund from credit institutions was recorded as tax revenue for the institutions of the European Union.

In 2016, the tax revenue of the state totalled EUR 45.3 billion. The growth from the year before amounted to 4.5 per cent. The tax revenue of municipalities totalled EUR 22 billion and grew by 0.4 per cent from one year back. The accruals of compulsory social security contributions paid to social security funds increased by 3.7 per cent and totalled EUR 27.6 billion. The proportion of taxes and statutory social security contributions in consolidated total general government income was 81.7 per cent in 2016.

In 2016, the net tax ratio increased to 18.3 per cent from 17.6 per cent in the year before. The net tax ratio is calculated by deducting the subsidies, and current and capital transfers paid by general government to households and enterprises from the tax ratio.