Year: 2024

Commerce provides employment and tax revenue in Finland – however, domestic specialty goods trade is affected by the government’s tax policy  

Commerce is one of the largest sectors of business life and the Finnish economy, both as an employer, a creator of economic growth and a payer of taxes. The VAT revenue generated by commerce's domestic sales is also up to half of total VAT revenue in Finland. However, the government has weakened the international competitiveness of specialty goods trade by tightening VAT, and this tightening will not be reflected in the tax revenue as the government has hoped. 

Energy consumption and emissions in the commerce sector are decreasing effectively, but achieving the targets requires political decisions

In 2022, companies in the commerce sector reduced their electricity consumption by one per cent and their heat consumption by 9 per cent compared to 2021, says Statistics Finland. According to the carbon index for commerce, the sector’s CO2 emissions decreased by 12.3 per cent at the same time. Commerce's goal is to achieve carbon neutrality by 2035 and zero emissions by 2050, but achieving these goals requires policy measures that support the sector.

Real added value for consumers with the over-the-counter medicine reform

The Finnish Commerce Federation is aiming for an over-the-counter medicine reform that genuinely benefits customers and creates better conditions for lower prices. Introducing a range that meets consumers’ needs for over-the counter medicines within the scope of the geographically comprehensive network and extensive opening hours of commerce sector companies would improve the accessibility of medicines. A wide range of over-the-counter medicines has long been sold from medicine cabinets in shops. The reform should take advantage of these medicine cabinets and the experience gained from them.

Test purchases from the Temu.com marketplace did not meet European requirements

Due to the administrative costs related to product safety and consumer protection, the purchase prices paid by Chinese sellers are 30–40 percent lower than those paid by Finnish stores for comparable products. However, it’s not always about comparable products, as items sold on marketplaces in third countries often do not meet European requirements in terms of labeling, traceability, or quality. This was clearly evident in test purchases made in May 2024 on the marketplace Temu.com.

The willingness of Finns to pay for sustainable products is strengthening – Doubts about Asian e-commerce are increasing

Price-driven purchasing has intensified over the past two years. Nevertheless, the majority of Finns are willing to pay a higher price for sustainable and recyclable products. Most Finns would prefer to support stores that take social responsibility in Finland, but the willingness to pay for this is weaker. Concerns about product safety in Asian online stores have increased, and recent test purchases suggest there is reason for these concerns.

Tourism benefits the whole of Finland – particularly tourism exports should be invested in

The cash flows created by tourism in Finland’s economy are largely dependent on domestic tourists, as international tourists only account for 11–12 per cent of Finland’s total tourism receipts. According to the Finnish Commerce Federation, both development support and target-oriented cooperation between municipalities and companies would be needed to accelerate Finland's tourism exports.

The government must take the trade sector into account in its growth policy: investments in innovation policy are needed 

In a challenging competitive situation, commerce requires the government to act in order to secure the growth and competitiveness of commerce in the budget session. The government should emphasise increasing productivity in the service sector by investing in innovation policy and encouraging companies to adopt innovations. In addition, regulations that cause costs for companies, such as reporting to the authorities, should be removed.  

Commerce will begin to slightly grow next year - the government will support the international competitiveness of commerce with its RDI policy

The decline in the retail trade’s sales volume has continued this year, and the Finnish Commerce Federation predicts that it will decline by approximately one per cent towards the end of the year. Next year, commerce sector sales are expected to begin to moderately increase. However, the forecast has its risks, and it is important for the government to ensure the international competitiveness of commerce through its RDI decisions and avoid cutting consumer purchasing power through tax policy. The soon-to-be tightening of VAT will not ease the situation, especially for specialty goods trade.