Year: 2024

Tax increases chastise commerce and the consumer

The goal of the budget framework session to reduce indebtedness is understandable, but the government's decision to increase the general VAT rate by one and a half percentage points is a significant blow especially to the speciality and household goods trade operating in Finland. The necessary structural reforms also remained minor in the budget framework session.

Structural reforms needed in the budget framework session – an efficient market improves consumers' purchasing power  

The budget framework session offers the last chance to make the necessary structural reforms in order to improve state finances and consumers' purchasing power, says the Finnish Commerce Federation. The general VAT rate should not be increased as this would heavily affect domestic specialty goods trade and low-income households, in particular, by weakening purchasing power. RDI funding should also be reformed and directed to the trade sectors.  

Online buying from domestic sources decreased while online buying from China increased – Finnish speciality goods trade needs support in order to compete

Online shopping by Finns from domestic and foreign sources shrank by a good three per cent last year. Online purchases of domestic commodities decreased more than those of foreign ones, which was also affected by the rise of Chinese digital trade giants Temu and Shein. In February 2024, Temu has already become the most used foreign marketplace by Finns when measured by the number of visits. In order to cope with international competition, domestic speciality goods trade should receive support for digitalisation and, for example, the adoption and application of AI-based solutions.

Additional investments in research and development activities must be directed to applied research and diversification of the economic structure

Service Sector Employers Palta and the Finnish Commerce Federation demand that growing public research and development funding be directed towards applied research and diversification of the economic structure. The current situation, in which the productivity of private services in particular has lagged behind the development of competitor countries, is unsustainable.

An efficient pharmaceutical sales system would save the economy up to EUR 250 million

The Finnish Commerce Federation encourages the government to implement structural reforms in the financial decisions of the budget framework session. According to calculations commissioned by the Federation, the structural reform of the retail distribution system of pharmaceuticals would bring the combined annual savings of the state and consumers up to EUR 250 million. Due to the increasing pharmaceutical reimbursement costs of the ageing population, there should be no further delays with the reform.

Development of sales has its risks in the commerce sector – the government must ensure consumers' purchasing power  

The turnover of retail trade decreased by more than three per cent last year. This year, sales are forecast to decrease by about one per cent. Towards the end of the year, improving purchasing power will start to drive up retail business. Driven by international competition, the need to improve productivity and efficiency will continue to be reflected in employment in the commerce sector. It is important that the government considers consumers' purchasing power in its decisions.