Majority large companies able to adjust prices after VAT hike: Survey

Large companies in Finland are well prepared for the increased VAT rate entered into force at the start of September, according to a recent Corporate Pulse survey commissioned by OP Pohjola Financial group.

A clear majority of large companies said that they have been able to adjust the price of their product or service according to the increase, said OP in a press release on Friday referring to the survey.

About 17 per cent of large companies have had to acquire additional resources due to the increase.

The increase of the general VAT rate from 24 to 25.5 per cent entered into force on 1 September.

About 63 per cent of the companies that responded to the survey said that they can adjust the price of the product or service they offer to meet the new VAT rate but 13 per cent of the respondents did not agree with this.

A quarter of the respondents could not give an answer on the matter.

“For companies, it is good that a clear majority of large companies can adjust the prices of their services or products according to the increased VAT rate. While increased taxes also lead to rises in prices, it is in our common interest to participate in the national economy,” said Katja Keitaanniemi, Chief Executive Officer of OP Corporate Bank.

The implementation of the increased VAT rate has required companies to undergo various changes, especially in terms of financial management processes such as systems and programs.

However, only 17 per cent of large companies stated that they had to acquire additional resources due to the increased VAT rate.

“Although the matter has required flexibility from companies, balancing the national economy is necessary in the current situation, and tightening the VAT rate is one part of the means available. The current change aims to increase annual tax income by about a billion euros,” said Keitaanniemi.

A total of 100 Finnish companies with a turnover of at least 100 million euros responded to OP’s Corporate Pulse survey, which was conducted by Taloustutkimus Oy over phone in August.