Finland money

Finland must improve trade and tax data transparency, asks Finnwatch

FINLAND is the 88th best country in the world for keeping business and tax information secret, according to the Financial Secrecy Index 2022.

Finnwatch, a Finnish non-governmental organization that studies the impacts of business activities, said last week that the country has a lot to do to improve the transparency of business ownership data and tax reporting requirements.

The organization recalled that shortcomings in commercial and tax transparency increase the risk of corruption and constitute an obstacle to investigations into money laundering and tax evasion. Finland performed poorly in the index in terms of transparency of company ownership data, as the register of beneficiary information is not open to everyone and only contains information on major shareholders. companies.

This, he said, made it difficult to trace the wealth of oligarchs under economic sanctions following the Russian invasion of Ukraine.

“In Finland, investigative journalists and non-governmental organizations must apply for a permit to obtain information from the beneficiary information register. The register is also difficult to use: to obtain information, you really have to know in advance what you are looking for,” says Saara Hietanentax specialist at Finnwatch.

Finland was also criticized in the report for the fact that requesting company financial statements from the commercial register is not free of charge and tax rulings issued by courts are not fully public or available for a fee. Companies in the country are also not required to publish comprehensive country-specific tax reports that would further clarify their tax contributions and other key indicators.

Finnwatch, unlike the index, also questioned the sufficiency of country-specific reporting requirements for public companies.

“The reporting requirements for public companies have serious shortcomings and, despite promises, the new reporting template has still not been released,” Hietanen lamented.

Finnwatch said current government revenue data only accounted for 74% of all capital revenue, meaning around 3.4 of the €13.3 billion in capital revenue reported in 2019 was not not reflected in public data. This skews public income data, particularly because capital income, including tax-exempt capital income, is more common in higher income brackets.

When public tax data does not include tax-exempt income, citizens can get the wrong impression of actual tax rates.

“The problem is fortunately easy to solve, because the tax authorities already have information on tax-exempt capital income. It’s just a matter of political will to increase transparency,” Hietanen said.

Finland has fallen 17 places – that is, improved its ranking – in the index of 141 countries since 2018. Compiled annually by the Tax Justice Network, this year’s index has been dominated by the United States– States, Switzerland, Singapore, Hong Kong and Luxembourg. The world’s least secret countries, on the other hand, were Montserrat, San Marino, Nauru, Gambia and Slovenia.

Aleksi Teivainen – HT