HELSINKI: The City of Helsinki loses roughly €60 million a year in tax revenue due to shadow economy activities, the Audit Department of Helsinki estimates. A report published by the Tax Administration on Tuesday nevertheless shows that the city has succeeded in concentrating its purchases with companies that are more reliable than average through its efforts to fight the shadow economy.
The City of Helsinki is one of the largest maker of public procurements in Finland. Altogether, municipalities and other public entities spend roughly 35 billion euros a year in goods, services and construction projects. Helsinki alone spent approximately 1.6 billion euros in 2013 in goods and services provided by third-party companies.
The assessment carried out by the Tax Administration incorporated procurements made by Helsinki from some 4,740 companies in 2006—2013. 32 per cent of the companies were companies with net sales of a maximum of 0.4 million euros, 32 per cent companies with net sales of 0.4—2.0 million euros, 25 per cent companies with net sales of 2—10 million euros and 11 per cent companies with net sales of 10—40 million euros. All of the companies incorporated in the study provided goods or services to the City of Helsinki in 2006—2013 but not necessarily throughout the assessment period.
