Changes in the schedule for receiving tax refunds or paying back-taxes means that a majority of taxpayers in Finland can soon expect either a windfall or a tax bill.
While previously all taxpayers received a payout or had to pay tax arrears in December, starting this year the schedule has shifted to August or September. The paydays for Finnish residents expecting a refund will be 6 August and 4 September.
The Finnish Tax Administration Vero will pay out 806 million euros in tax refunds in August, followed by another 1.3 billion in September.
"We cannot yet say what the total tax refund figure will be because we have not completed processing all tax returns. Most likely it will not be less than last year," said Vero senior officer Tarja Tapio.
While some taxpayers will likely be celebrating Christmas in August as a result of their earlier-than-usual refund, others will be forking out a total of 89.5 million euros in back taxes. Tax officials will be looking to collect another 143 million euros in arrears in September.
Monday 29 July was the last day for taxpayers to provide the tax administration with an account number if they want a refund in August. To qualify for a direct payment to a bank account in September, taxpayers will have until next Monday to provide an account number on paper, or until the end of August to provide it online via the MyTax service.
Minimal impact on Xmas sales
In the past, the December tax refund played a major role in Christmas sales. This year’s reform could mean a decline in Christmas shopping, according to Toni Jääskeläinen, a tax specialist with the Finnish Commerce Federation.
"The sales peak may [be] spread out in the sense that there will no longer be a single big boost at Christmas but sales may rise throughout the autumn. However Christmas sales are still robust so any possible impact will be minor," Jääskeläinen added.
However he noted that it is not yet known exactly how the earlier refund payout will affect business overall. He said that he expects to see retail sales grow during the summer.
"The change has not required retailers to take any special action. The most important thing for businesses is that purchasing power remains at a good level. This will not affect that. When we look at the entire year, then there is no major impact," Jääskeläinen concluded.
Consumer queries about payment date
Meanwhile Tapio said that the tax administration has received some queries about the changes to the tax system.
"Timetable-wise, this is a major change but people seem to have understood it well. We have had some questions relating to the payment dates and we will likely receive more calls. In that sense this is a positive [change] for customers, because they will now get tax refunds several months earlier," she noted.
A quick straw poll conducted in downtown Helsinki suggested that members of the public were not especially moved either way by the reform.
"It’s quite nice that we’ll get a tax refund a bit earlier," said Antti Jänkälä, who will receive a refund in September.
Ruusa Loukko also said that she expects to see a positive change in her bank account in September.
"It’s quite good after summer. At Christmastime there is unnecessary spending so maybe now we will think a bit more about how to use that money," she added.
Kati Kyyrönen is another one of the lucky taxpayers who will have excess taxes paid refunded. But she said she is not sure when she will receive it.
"I’ve been quite confused about this reform. I don’t know yet when I’ll receive a refund but it doesn’t really matter. I believe it will come. I’m not planning [to do] anything special with it," she commented.
