ETR in Finland

1
ETR in Finland
International seminar on Ecological Tax Reform
(ETR) 11.4.2006 Tallinn Erja Heino The Finnish
Association for Nature Conservation (FANC) erja.he
ino_at_sll.fi
International
2
High income taxHigh employers social
contributionsFew environmental taxes and
concentrated on energy and trafficNon-existing
taxation on (other) natural resource use
Environmentally related taxes 3,2 of GNP (3,4
in 1998)
Playfield
3
BUTMain change so far large income tax
reductions. No new environmentally related
taxes.Some environmental taxes even lowered like
tax on beverage packaging.Finland delivered all
emission allowances free of charge.
ETR in governments programme
4
Fiscal income from environmentally related taxes
in Finland (million EUR)
115,596

130,145

139,803

147,713

153,762

Environmental tax revenues as
a percen
t
age of GDP

3.4

2.9

3.1

3.1

3.2

Note A Final accounts, B Budget, BP Budget
proposal

http//www.stat.fi/tup/tiedotteet/v2004/198ympe.ht
ml
Source Statistic Finland

5
Finland first to introduce CO2 tax in 1990
(fuel oils, natural gas, coal and
electricity)In 1994 changed to an energy and CO2
tax, carbon content defined 75 , energy content
25 , reduced tax on natural gas From 1997 CO2
tax again a 100 carbon tax, but only on heat
production, for peat reduced taxIn 1998 refund
scheme for energy intensive industries 10-12
companies, mainly pulp and paper get itToday CO2
tax is the most dominant (half)of various duties
on fossil fuelsIn 2005 CO2 tax on peat was
abolished
Energy related taxes CO2
6
From1993 basic excise tax on mineral oilsFrom
1994 precautionary stock fee and oil pollution
fee on fossil fuels ? minor meaning From 1997
excise tax only on light fuel oil
Excise tax and other fees on fuels
7
Tax rebate on renewable grants appr. 50 million
EUR to renewable energy producers.33 million
investment aid for renewable energy year 2002,
firstly for wood energy, second wind 10 million
RD aid to renewable energy technologies in 2003
Emission trading all emission allowances
delivered free of charge? Energy companies
profited for this in 2005Pohjolan voima 56
milion EUR, Fortum 25, Helsinki Energy 13
Energypolicy and ETR
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Excise duty on electricity consumption
(Eurcent/kWh) before 1997 the production was
taxed, now consumption taxed

o
cent/kWh)

1997 1999 2000 2002 2005
House- hold 0,57 0,70 0,70 0,70 0,74
Industry 0,25 0,43 0,43 0,43 0,45


Source IEA., 2004, and IEA, 2005
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Waste tax on waste delivered to municipal
landfills from year 1996 15 EUR/tonne from
year 2005 30 EUR/tonneNo tax to waste
incineration or private landfills? resulted in
popularity of incineration and distorts the waste
treatment markets
Tax on waste
10
Tax on non-refillable beverage containers since
1993 compulsory deposit system.? the amount of
packaging waste in Finland is approximately half
of the average in EU countries2005 a reduced
charge on recycled one way packaging 0,085
EUR/litrenon recycled 0,51 EUR/litreCharge for
recycled beverage packaging will be removed ?
resulted already in growth of beverage packaging
waste, in the long run reusable plastic bottles
will be replaced by one way bottles.
Packaging taxation
11
New taxes on the use of natural
resourcesgravel materials, water, metals, oil,
etc.New/enlargened taxes one way or short live
products like packing, napkins, one way battery
Waste to industry landfills and incineration
Road transportation Nuclear power SO2, NOx
AdvertisementNitrogen and phosphorus
ETR proposals of FANC
ETR proposal of FANC
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Reduce taxation and costs- income tax- VAT on
renting, repairing, maintenance and leasing
services- employers social contributions on
services- of all bio fuels (biodiesel, -ethanol)
used in traffic- VAT on eg. ecolabelled products
ETR proposals of FANC
13
Reduce harmful subsidies, for instance- on
agriculture and forestry- on energy investments
for non-renewable like peat and waste- exemption
for commuter costs - deduction of company
carNew instruments- feed-in tariff needed for
wind and solar energy, but is offered for peat
electricity companies have to sell certain amount
of electricity produced of peat
ETR proposals of FANC