HELSINKI: The OECD offered its verdict on Finland’s much-talked-about basic income trial in a country report that it released on Wednesday. The report was delivered by former Finnish Prime Minister and current deputy secretary-general of the organisation, Mari Kiviniemi.
“We have carefully reviewed [and concluded] that this would happen if the basic income to be distributed were cost-neutral from the perspective of state income and expenditure,” Kiviniemi said, referring to the assessment that the pilot would worsen poverty in Finland.
According to OECD calculations, a basic income programme would either be too costly or would provide insufficient social protection for those it intends to help. Compared to the current system, couples would be better off than singles and 150,000 people would fall below the poverty line, the organisation found.
Lower income taxes would promote growth, employment and would also improve competitiveness.”
“But because Finland has a highly functional public sector that we want to maintain, we need tax income from elsewhere,” she pointed out.
Kiviniemi said that more tax revenues could come from sources such as value added tax, as well as property taxes and different environmental levies, since such measures would not inhibit economic growth.
Finns are likely to be more tolerant of environmental taxes than property taxes. However removing the category of goods and services subject to lower value added tax would probably result in an uproar, since few people would want to pay 24 percent VAT on items such as food.
