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Finland: Tax on Public Broadcasting

(Sept. 7, 2012) The President of Finland approved law proposal HE 28/2012 on August 31, 2012, which introduces a tax to finance the country’s national public service broadcasting company, YLE. (Laura Pakarinen, Finland: TV Tax Adopted, TAX NEWS SERVICE (Aug. 31, 2012), International Bureau of Fiscal Documentation (IBFD) online subscription database; text of the proposal [in Swedish] [including the proposed amendments to several tax laws], RP 28/2012 rd, FINLEX (last visited Sept. 7, 2012).) The “new, more progressive fee structure … will be calculated according to combined household income and then levied automatically on every residence.” (Lauren Kirchner, Scandinavian Public Media Fight for Their Right to Grow: Potential Regulatory Changes Spell an Uncertain Future, COLUMBIA JOURNALISM REVIEW (May 31, 2012).)

The TV tax, to apply from January 1, 2013, imposes a 0.68% levy on the annual total taxable earned income and capital income of individual taxpayers 18 years of age or older, with the maximum amount of tax not to exceed €140 (about US$177). If the tax amounts to less than €50 (about US$63) it will not be collected. (Laura Pakarinen, Finland: TV Tax – Government ProposesIntroduction on Individuals and Corporate Entities, TAX NEWS SERVICE (Apr. 4, 2012), IBFD.)

If a corporate entity or similar entity has taxable income of at least €50,000, the TV tax is €140 a year plus 0.35% of the taxable income that exceeds €50,000, with the maximum amount of tax limited to €3,000 (about US$3,785). (Finland: TV Tax Adopted, supra.) The similar entities include “inter alia, companies, cooperatives, municipalities, savings banks, investment funds and foundations.” (<?Finland: TV Tax – Government Proposes Introduction on Individuals and Corporate Entities.)

The state and municipalities, including state and municipal public entities, state church parishes, religious communities, and entities that are tax exempt under the income tax law, are exempt from the TV tax. (Finland: TV Tax Adopted, supra.) The TV tax will not apply to individuals and corporate bodies resident in the Åland Islands, a self-governing territory of Finland. (Finland: TV Tax – Government Proposes Introduction on Individuals and Corporate Entities, supra.)

Under current Finnish tax law, upon beginning to use a TV set the user must notify a separate state authority, which will then charge the user a license fee. Because many users – an estimated one in four households – reportedly failed to notify the authority and avoided paying the fee, the government decided to replace it with the new tax. (Id.; Kirchner, supra.) Some Finns had also “objected to the fact that the license fee was the same for every household, regardless of income or number of residents, so that it was more of a burden for poorer households and people who live alone.” (Id.)

YLE Director General Lauri Kivinen welcomed the TV tax proposal early on, commenting that it would preserve the company’s independence while providing a fair system of financing that would not place lower income audience members at a disadvantage. However, Mikael Pentikäinen, editor of the newspaper Helsingen Sanomat, criticized the measure for “favouring YLE while treating print media badly,” adding that “the half-a-billion euros expected to be gathered annually through the tax was too much for public broadcasting.” (New ‘YLE Tax’ in 2013 Draws Mixed Reactions, UUTISET (Dec. 15, 2011).)

In the meantime, public broadcast media in Sweden, facing a new charter to be adopted this year and last until 2019, are reportedly fighting a similar proposed change from a fee-based to a tax-based system in their country. (Kirchner, supra; see also Rodney Benson & Matthew Powers, Public Media and Political Independence: Lessons for the Future of Journalism from Around the World (Feb. 2011).)