Draft budget for 2008

Earlier this week Finance Minister Jyrki Katainen (National Coalition Party) presented his draft budget for 2008.

Under the proposal, the duty on spirits will increase next year by 15 percent, while taxes on lighter alcoholic beverages will go up 10 percent. The tobacco tax will remain the same. Meanwhile the inheritance and pension taxes are to go down.

Pensions are to increase by 20 euros, while state child support for single parents will go up by 10 euros a month. State student support will also increase by 15 percent beginning next year. Furthermore students will be able to earn 30 percent more than before, while still retaining student support benefits.

The petrol tax will also increase, as will the energy tax.

Overall tax rates will go up ever so slightly. Presumably some of the tax cuts promised during the election campaign will follow later in the term, but for now the Ministry of Finance is of the opinion that we should be saving for a rainy day - or watch out for "overheating", as Katainen puts it.

To name a few critics, trade unions think workers should get more tax breaks, other ministries think they should get more money, car users think they shouldn't be taxed quite so much, and farmers think they should be compensated for the planned energy tax hike. The opposition doesn't like it, of course. On the other hand, economists seem to like the proposal okay because inflation and debt are combatted.

The full draft budget can be accessed online (fi).

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