Finnish Tax Administration's Year 2021 – sustainability report

The handprint is an indication of sustainability

Every one of us inevitably has an impact on our environment in one way or another. When talking about the carbon footprint or water footprint, the impact is often negative. Instead, the handprint is a good indicator when making good and sustainable acts.

We have now brought handprints and footprints together in the Finnish Tax Administration’s first sustainability report. Sustainability is being developed following the State Treasury’s good practices and guidelines.

Sustainability reporting follows the Sustainable Development Goals (SDG) of the United Nations (UN) that were published in the spring of 2021. The 2030 Agenda, the UN’s sustainable development programme, sets a framework for sustainability reporting in central government. It defines 17 broad and interdependent SDGs. We have selected the SDGs that are the most appropriate for us, and we now want to talk to you about their achievement.

Finns are good taxpayers, and our goal is to give part of the data we collected in 2021 back to them. This is our first sustainability report, available in full under ‘Tulosohjausasiakirjat’ (Performance reports) at the vero.fi website (available in Finnish).

The content of this sustainability report is based on the information of our financial statements, personnel report and Green Office report, as well as the report on the Finnish Tax Administration’s international activities.

The three pillars of our sustainability development are:

• the development of administrative activities to enable even more accessible and environmentally friendlier services for taxpayers,
• our internal sustainability activities, including the Green Office,
• sharing best practices, and cooperation in development.

To sum it all up: taxation brings us together. We made a video for this report – watch it on Youtube. In the video, young people discuss with Markku Heikura, our Director General, at Oodi, Helsinki’s Central Library.

The discussion focuses on digital services and sustainability, the two key themes we seek to advance in our activities. It also focuses on the Finnish Tax Administration’s key purpose: we need to secure tax revenue for Finland and make it as easy as possible for our customers – in other words, you, the taxpayer.

Thank you for your cooperation!

Kati Kalliomäki, Communications Director

Sustainable Development Goal 8: Decent work and economic growth

Achieving sustainable economic growth, full and productive employment and decent work for everyone.

This section describes the positive impact of the Finnish Tax Administration’s activities (handprint) on the achievement of SDG 8.

The Finnish Tax Administration aims to achieve this goal by providing effective services for society and supervising any shortcomings.

The Finnish Tax Administration seeks to provide easier access to services through digitalisation. Eliminating the shadow economy and any violations in working life, and ensuring fair competition enable work and economic growth in accordance with the SDGs.

The Finnish Tax Administration’s vision is “the best taxation – together”. According to this vision, the Finnish Tax Administration aims to be among the pioneers in the digital economy. We have integrated our services into third-party business platforms. Taxpayers do not have to worry about their taxation, as taxes are collected where each taxable transaction occurs. As a result, taxation is a seamless part of everyday life. The tax gap has decreased and tax revenue for society has been secured.

Positive customer experiences

The Finnish Tax Administration’s strategic goals are securing tax revenue, fair taxation and a positive customer experience.

The goal is to build positive customer experiences in the management of all tax matters. When gaining positive customer experiences, taxpayers can have their matters taken care of, are satisfied with services and receive equal treatment. 

Indicators and results in 2021

According to the continuous monitoring of customer satisfaction with the Finnish Tax Administration’s telephone service, taxpayers estimated in 2021 that 90% of all calls were good or excellent and that 93% of their matters were solved or initiated. The results are based on estimates of roughly 110,000 calls.

For the Finnish Tax Administration’s chat service, the corresponding figures were 45% (good or excellent) and 51% (matters solved or initiated). Estimates were made regarding some 100,000 uses of the chat service during the year. The difference in satisfaction with the telephone and chat services can largely be explained by the use of the chat service being unanimous, which is why not all matters can always be solved.

The measurement of customer satisfaction with in-person services also started in 2021, and some 2,200 estimates were received. Of all respondents, 96% experienced that they had their matter solved or initiated, and 93% gave a good or excellent score for services.

In 2021, a customer survey was also conducted regarding the experiences of accounting firms in tax audits. Representatives of accounting firms who had participated in a tax audit during the previous 18 months were interviewed for the survey. Of all respondents, 96% felt that their opinions on the Finnish Tax Administration’s activities increased or at least remained unchanged as a result of their participation in a tax audit. In addition, 85% considered that their cooperation with tax auditors proceeded smoothly.

Audited taxpayers receive a customer feedback survey after their audit, with certain exceptions. A total of 19% of taxpayers receiving the survey responded to it. In 2021, customer satisfaction was 4.2 (2020: 4.3) on a scale from 1 to 5.

Taxpayers’ satisfaction is measured by a customer satisfaction survey conducted every three years. In the previous survey conducted in 2020, the total score was 8.4 on a scale from 4 to 10. In the 2017 survey, the total score was 8.3.

Electronic services for taxpayers – MyTax

MyTax is the Finnish Tax Administration’s online service which is developed with taxpayers. Taxpayers can log in to MyTax using their personal online banking codes or a mobile certificate.

Indicators and results in 2021

The MyTax logout page asks the simple question “How was your experience with MyTax?” A total of 85% of the 1.2 million or so responses given to the question during the year said that the experience was positive.

The number of MyTax logins increased in 2021. The number of revised tax cards made in MyTax increased relative to the total number of revised tax cards, and more tax cards were supplemented in the service than before.

• MyTax logins: 28 million (2020: 25 million)
• Revised tax cards in MyTax: 76% (2020: 74%)
• Tax returns supplemented in MyTax: 86% (2020: 85%)
• Use of MyTax relative to all tax services: 92% (2020: 89%)

Vero.fi website and the Finnish Tax Administration’s social media channels in 2021 in figures

• Visits to Vero.fi in 2021: 38 million (2020: 40 million)
• Social media content displayed in 2021: 22 million
• Reactions in social media channels in 2021: 348,000; questions: 20,000; followers: 177,000

Combating the shadow economy

The Finnish Tax Administration combats the shadow economy and, therefore, eliminates unhealthy competition, which has a positive impact on the achievement of SDG 8.

In its reports on the shadow economy, the Grey Economy Information Unit assesses different shadow economy phenomena and their impact, examines the effectiveness of law, and measures the extent of the shadow economy. The reports are prepared to support the activities of different supervisory and permit authorities. A total of 185 reports on the shadow economy, statements and other accounts of information were prepared in 2021. Demand for the Grey Economy Information Unit’s obligation compliance report service remained high, and the unit responded to more than 707,000 requests during the year. In 2021, four additions were made to the purposes of obligation compliance reports as a result of a legal amendment, and reports were prepared to support 29 different official tasks. The Grey Economy Information Unit acts as a national coordinator in building the authorities’ joint overview of the shadow economy and financial crime, and maintains the Grey Economy and Economic Crime website, which acts as its publication platform. During the year, 65 publications were made under overview activities.

In combating the shadow economy, unfounded registrations of companies in the Finnish Tax Administration’s registers were prevented and any inappropriate corporate entities were removed from registers: a total of 1,220 registrations were prevented or removed regarding the prepayment and VAT registers in 2021. Of the tax audits conducted for combating the shadow economy, 94% resulted in further measures and 86% in consideration for reporting to the police.

Cooperation with the authorities and stakeholders has been close in combating the shadow economy. Different projects have been advanced actively under the national programme for combating the shadow economy and financial crime, including the Finnish Tax Administration’s project for ID misuse and refund fraud, and the authorities’ joint resource monitoring system. Preventive urban cooperation was extended with the Finnish Competition and Consumer Authority. International cooperation has also continued actively: the Finnish Tax Administration participates in Nordic threat analysis activities and was among the first to join the FCInet data system, in which information on cross-boundary fraud is exchanged. Results of international cooperation have been implemented in the prevention of national financial crime.

Sustainable Development Goal 10: Reduce inequalities within and among countries

This section describes the positive impact of the Finnish Tax Administration’s activities (handprint) on the achievement of SDG 10.

Fair taxation is one of the Finnish Tax Administration’s strategic goals. It means that the Tax Administration’s activities are nationally harmonised, of a high quality and predictable for taxpayers. 

Fair taxation

SDG 10, target 10.3: Ensure equal opportunity and reduce inequalities of outcome, including by eliminating discriminatory laws, policies and practices and promoting appropriate legislation, policies and action in this regard.

The tax gap is the difference between legal and actual tax revenues. Like many other countries, Finland has only calculated the tax gap regarding value added tax. Finland’s VAT tax gap was approximately 3% of the legal tax revenue in 2019–2020, being one of the lowest in Europe.

The tax gap for 2021 could not be calculated before the publication of this report due to various retroactively submitted source data. A small tax gap is an indication of fair taxation. Through its activities, the Finnish Tax Administration has contributed to tax law being enforced nearly in full regarding those concerned.

The smooth registration of taxpayers and changes in the registration position are prerequisites for the start and continuity of business. The Finnish Tax Administration’s role is to safeguard the preconditions of prepayment, employer and VAT registrations and ensure that registers are up to date. The goal is to process role-based registrations regarding these registers in 21 days. In 2021, tax officers carried out 61,300 role-based registration tasks, of which an average of 61% were processed within the targeted time.

The Tax Recipients’ Legal Service Unit, an independent body of the Finnish Tax Administration, promotes the fulfilment of an effective and predictable tax system by issuing some 900 responses and lodging around 150 appeals every year. Responses can be issued when a taxpayer or anyone seeking an advance ruling requests rectification for their taxation, the Finnish Tax Administration’s advance ruling or the Central Tax Board’s advance ruling at the administrative court. In the appeal process, the Tax Recipients’ Legal Service Unit requests rectification for a completed tax assessment, an advance ruling issued by the Tax Administration or the Central Tax Board or a decision made by a competent authority in charge of appeals.

As a rule, the Tax Recipients’ Legal Service Unit requests rectification when the case in question involves a matter subject to legal interpretation. The legal effectiveness of the unit’s activities is represented by the percentage of its appeals for which the administrative court or the Supreme Administrative Court issues a decision. In 2021, the administrative court issued a decision for 9% and the Supreme Administrative Court for 33% of all appeals lodged by the unit.

Claims for adjustment

In fair taxation, a key factor is the possibility to request rectification for taxation by submitting a claim for adjustment. In 2021, some 150,000 claims for adjustment were submitted. Congestion in the processing of claims for taxation-related adjustment and long processing times were regarded as the most significant challenges in 2021. The average processing time was roughly ten months, and in 78% of all claims for adjustment resolved in 2021, the processing time was more than six months. Corrective measures were taken during the second half of the year by recruiting temporary employees to unravel the congestion and conducting a root cause analysis to find permanent solutions for keeping processing times reasonable.

The Assessment Adjustment Board, an independent body of the Finnish Tax Administration, processes claims for adjustment in taxation. A decision on a claim for adjustment can be requested to be rectified by lodging an appeal to the administrative court. In 2021, administrative courts issued 1,072 decisions on claims for adjustment in taxation. The Assessment Adjustment Board’s decision was maintained in 86% of the cases processed by administrative courts.

Tax debt management and recovery

At the end of 2021, unpaid taxes totalled €3.76 billion (-12.5% compared to the previous year). The decrease in tax debt resulted, above all, from the unusually high number of payment arrangements made in 2020 so that the taxes paid in 2021 relating to these were higher than the amount of new tax debt. VAT accounted for €1.76 billion (47%), income taxes of individual taxpayers made up €1.31 billion (35%) and income taxes of corporate entities covered €485 million (13%) of unpaid taxes.

The punctuality of tax payments improved from previous years, and recovery measures (payment reminders and arrangements, enforcement procedures, payment demands with a threat of bankruptcy) resulted in tax debt payments better than before. The low tax debt is also an indication of fair taxation, as everyone who has a statutory obligation to pay taxes participates in the payment of taxes as fully as possible.

Customer solutions during the coronavirus pandemic

The coronavirus pandemic has potentially made it more difficult for the Finnish Tax Administration’s customers to take care of their tax matters. The Tax Administration has supported its customers during these exceptional circumstances. Due to the pandemic, the Tax Administration extended the deadline for tax returns of corporate entities and benefits under joint administrations by one month in the spring of 2020 and 2021. In addition, the Tax Administration has supported any customers facing payment difficulties by providing payment arrangements with lighter conditions – by providing an extension for the payment of taxes and a lower late-payment interest. The lighter payment arrangements granted during the pandemic have been fulfilled effectively. Furthermore, coronavirus restrictions have not increased the number of payment demands with a threat of bankruptcy or bankruptcy petitions issued by the Tax Administration.

Tax compliance

According to an extensive national interview survey commissioned by the Finnish Tax Administration, 95% of Finns consider paying taxes an important civic duty. A clear majority, or 82%, believes in the accuracy of the tax decision. The survey was conducted in September 2021 (N=1,020).

As many as 96% of Finns agree that the collection of taxes is important for maintaining the welfare state. In addition, 79% are happy to pay their taxes and feel that they get something in return.

Case: Information for young people and everyone entering working life

In November 2021, the Finnish Tax Administration launched a new communication project to disseminate information about the use of tax revenue and increase positive attitudes towards the payment of taxes. The project is part of the Government’s programme for combating the shadow economy and financial crime, and it will continue until the end of 2023.

Communication has been targeted especially at young people and immigrants. Marketing on social media, carried out unusually in five languages in the autumn, comprehensively reached young people and young adults who use services. The material, built together with social media influencers, was viewed 216,187 times and received 24,391 reactions. In addition, the communication concept’s website had some 15,000 visitors.

Read more: Finnish citizens understand the significance of paying taxes – young people are a bit divided

Equality and non-discrimination

We require that all taxpayers are treated equally and without any discrimination in everything we do.

The Finnish Tax Administration operates consistently across the country. All procedures are nationally harmonised and there are no regional differences. Process control at an organisational level ensures that taxation is reliable, effective and harmonised. The Tax Administration’s customer service is organised and led consistently. For taxpayers, equal treatment means that the personal situation of each taxpayer is addressed individually, and guidance and advice are based on this perspective.

A separate document (Non-discrimination for the Finnish Tax Administration’s customers) has been prepared for promoting equality and non-discrimination and preventing any discrimination, and it is updated every three years.

Sustainable Development Goal 16: Promote just, peaceful and inclusive societies

This section describes the positive impact of the Finnish Tax Administration’s activities (handprint) on the achievement of SDG 16.

The Finnish Tax Administration builds trust between business partners and in public procurement. Measures include monitoring the registration of companies and the fulfilment of obligations, combating the shadow economy and maintaining the public tax debt register. The Tax Administration instructs taxpayers to act correctly through supervision and guidance. Furthermore, supervision and guidance aim to ensure that all taxpayers know how to and are able to fulfil their obligations.

The Tax Administration promotes the accuracy of taxation internationally. We are involved in developing the international exchange of information, and carry it out in the best possible manner.

The Tax Administration ensures that obtaining information on taxation is guaranteed as required by law. We disseminate public taxation information, maintain and publish statistics on taxation, and publish our financial statements.

International exchange of information

SDG 16, target 16.3: Promote the rule of law at the national and international levels and ensure equal access to justice for all.

Information about the international exchange of information and activities in this area:

• Automatic exchange of information (available in Finnish and Swedish, link to Finnish)
• Finnish and Estonian Tax Administrations started the real-time exchange of information
• Claim for adjustment
• Data processing and protection

Tax debt register, tax debt certificate and statement of tax debts

SDG 16, target 16.6: Develop effective, accountable and transparent institutions at all levels.

In the tax debt register or with the tax debt certificate ordered from the Finnish Tax Administration, taxpayers can verify that they or the company they represent do not have any unpaid taxes or that they have submitted all their tax returns concerning self-assessed taxes. Taxpayers can also order a statement of the payment of taxes from the Tax Administration to verify that they have submitted their self-assessed tax returns at the correct time and paid their taxes on time and at the correct amount.

Public taxation information, financial statements and performance agreement monitoring

SDG 16, target 16.10: Ensure public access to information and protect fundamental freedoms, in accordance with national legislation and international agreements.

As a rule, tax documents and the information they contain are confidential because they cover information on the financial position and private life of individual taxpayers.

The law separately defines the tax documents and registers that are public. By defining certain information to be public, the aim is to support openness and societal dialogue on taxation.

Public information on individual income taxes

Financial statements and performance agreement monitoring

The Finnish Tax Administration’s financial statements consist of an annual report and financial calculations with notes. The Ministry of Finance’s annual feedback is presented in different reports attached with the financial statements. All financial statements and monitoring reports on each unit’s performance agreements are available under the Finnish Tax Administration’s monitoring documents:

Performance reports (available in Finnish)

Sustainable Development Goal 17: Revitalize the global partnership for sustainable development

This section describes the positive impact of the Finnish Tax Administration’s activities (handprint) on the achievement of SDG 17.

The Finnish Tax Administration is a public organisation that openly shares its competence and knowledge, and builds partnerships. The Tax Administration supports the mutual exchange of information in different parts of society and also shares its technological competence. The Finnish Tax Administration has taxation-related development cooperation projects in Africa.

The goal of the Tax Administration is to be an active member of society. Furthermore, the Tax Administration is an active part of the taxation ecosystem. The Finnish Tax Administration also participates in international tax cooperation and the international exchange of information, and also exchanges information on taxation internationally.

Stakeholder cooperation

The goal is that the Finnish Tax Administration works more systematically and seamlessly with its stakeholders. An impact plan covering the entire Tax Administration ensures that the key impact goals defined in the strategy are generally identified and measures are planned in a tactically well-considered manner.

Last year (2021), key themes in stakeholder cooperation were: digitalisation, communication, guidance and advice, and the development of interfaces. The aim is to engage in consistent, transparent and high-quality cooperation with stakeholders.

Stakeholder meetings were started to be monitored more systematically in 2021, and there were 119 registered meetings. Information collection only started in August 2021. The highest number of meetings was held with representatives of the public sector, as well as with the Federation of Finnish Enterprises, the Social Insurance Institution of Finland and the Confederation of Finnish Industries. Meetings with other interest groups and accounting firms were also monitored.

Internationality

In 2021, the Finnish Tax Administration participated in more than 140 regularly convening international working groups and projects. Cooperation forums were held with the OECD, the EU, the Intra-European Organisation of Tax Administrations (IOTA), and the Nordic Agenda.

Themes that raised interest in international forums included the Finnish Tax Administration’s model of remote working and management, “the new normal”, agility, self-guidance, the tribal way of working, and the recent model of the real-time exchange of information between Finland and Estonia.

The Nordisk eTax website, updated under the Finnish Tax Administration’s coordination, was released in 2021. It serves Nordic taxpayers who have income or assets in a Nordic country other than their country of residence.

In 2021, the Finnish Tax Administration continued its active participation in the EU Cooperative Compliance Programme, started by the EU Commission in 2020. One of its aims is to provide small and medium-sized enterprises with an EU-wide tool for proactive guidance in cross-boundary situations where customer companies seek guidance for a tax question from the tax authorities of two or more countries. It is based on Cross Border Dialogue, a proactive cross-boundary model previously proposed by the Finnish Tax Administration. The model was built in 2021, and it will be piloted during 2022.

The Finnish Tax Administration’s development project with the tax administration of Tanzania continued using online missions, meetings and training.

The Finnish Tax Administration supports the tax administration of Cyprus in its off-the-shelf software project During the year, other individual workshops and training events were held with the tax administrations of Kenya, Eswatini, Serbia and Azerbaijan, among others.

Case: The Finnish Tax Administration’s development cooperation project with the tax administration of Tanzania

The Finnish Tax Administration and the Tanzania Revenue Authority (TRA) engaged in cooperation in 2018 to increase tax compliance. The goal of the IKI development cooperation project between the two institutions and funded by Finland is to develop TRA’s activities in the areas of tax compliance, customer orientation, communication and internal auditing. The Finnish Tax Administration’s specialists support their colleagues in Tanzania in registering taxpayers, segmenting customer groups, building a service concept, and reaching different customer groups.

The project is part of the Finnish Taxation and Development action programme based on the Addis Tax Initiative. In the Addis Tax Initiative, Finland is committed to doubling its support in helping developing countries bolster their taxation capabilities by 2020.

Footprint

In this section, we describe how the Finnish Tax Administration has addressed any negative ecological, social and financial impact caused by its activities on its operating environment. In addition to the current state of impact, we describe how the Finnish Tax Administration aims to reduce the direct negative impact of its activities – reduce its footprint in different areas of environmental sustainability, in particular.

Green Office environmental management system

Public organisations, such as the Finnish Tax Administration, have significant opportunities to decelerate climate change. The Finnish Tax Administration has prepared an environmental programme for its facilities and is committed to following selected WWF Green Office criteria.

The Finnish Tax Administration’s key environmental sustainability themes are related to the indirect responsibility for the environmental impact of its customers’ activities and the opportunity to influence and guide its customers’ activities in conjunction with taxation.

Paperless taxation and electronic services advance sustainable development. The Finnish Tax Administration is committed to reducing the consumption of paper and electricity, as well as travel expenses and waste volumes, and to increasing its personnel’s environmental awareness. In procurement activities, the aim is to cause as little environmental impact as possible throughout the lifecycle of products.

Between 2017 and 2025, the Finnish Tax Administration is committed to reducing:

• electricity consumption by 7.5%
• paper consumption by 30%
• business travel by 32%
• waste volumes by 18%

The Finnish Tax Administration’s carbon dioxide emissions continued to decrease in 2021. Emissions decreased from the previous year by 13% (500 tCO₂).

Use of facilities

Facility efficiency improved in 2021. The size of facilities decreased from 105,000 m² at the end of 2020 to 90,000 m² at the end of 2021. The floor area per annual work unit (AWU) decreased by roughly two square metres (effective floor area: 14.6 m² per AWU).

Wellbeing at work

Through its recruitment and personnel policy, the Finnish Tax Administration promotes equality and protects rights in working life. We communicate our values and ways of working openly.

The Finnish Tax Administration is a continuously improving expert organisation, in which employees’ skills are valued. As a large organisation, we offer various opportunities for building an individual development path through different tasks, projects, training and cooperation networks. Our will to improve ourselves, our network-based working methods and our culture of experimentation offer a setting where we can constantly develop our activities and find new ways of working. We work in modern facilities and use technologies in various ways.

The central government’s annual VMBaro job satisfaction survey was conducted in September 2021, with 83% of all Tax Administration employees responding to it. The job satisfaction index measured in the VMBaro survey was 3.70 (2020: 3.76).

Safety and security

Every one of us plays an important role in building a safe and secure digital environment. We have developed operating models and preparedness from the perspectives of safety and security by updating our continuation and readiness plans, for example.

In 2021, we also adopted Hoxhunt’s phishing training which helps us safely identify any signs of phishing messages and react correctly to them.