Finland to raise taxes on the wealthy to cover refugee costs

By Anna Ercanbrack and Jussi Rosendahl | REUTERS | September 10, 2015

HELSINKI (Reuters) – Finland’s government on Thursday proposed increasing capital gains tax and income tax on high earners to help pay for a 10-fold increase in refugees expected to arrive this year, its finance minister said.

The EU migrant crisis proposes a political as well as a financial challenge for the coalition, whose foreign minister, Timo Soini, heads the Eurosceptic party, The Finns, which campaigned for tighter controls on immigration.

Finance Minister Alexander Stubb said the highest bracket of capital gains tax would be raised by 1 percentage point while people earning more than 72,300 euros ($81,000) would be required to pay a so-called solidarity tax for two years, lowering the threshold from 90,000 euros.

“These will help to cover higher immigration costs which we estimate to be about 114 million euros this year,” Stubb told a news conference.

The centre-right coalition, which took office in May, is struggling to cut government spending quickly in a shrinking economy where unemployment is on the rise.

Finland last week doubled its estimate for the number of asylum seekers expected this year to up to 30,000, compared with just 3,600 last year.

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