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Finnish pensioners' taxes haven't risen, but some have less money

The taxation of medium-sized pensions has remained the same for the past three years, according to the Taxpayers Association of Finland.

seniori kaataa kahvia
File photo. Image: Ismo Pekkarinen / AOP

An assessment by the Taxpayers Association of Finland (TAF) finds that average-earning pensioners pay the same amount of taxes as they did last year.

However, pensioners who earn above or below the average saw their taxes go down somewhat.

The average pension in Finland is 1,664 euros per month.

About 18.4 percent of that goes back to the state in taxes, a figure which is more than eight percentage points lower than pensioners paid at the turn of the millennium.

TAF said the purchasing power of pensioners has markedly improved over the past 18 years.

Since Prime Minister Juha Sipilä's centre-right coalition government ascended to power in May 2015 taxation of lower- and higher pensions declined slightly, while taxes remained unchanged for those with medium-sized pensions, according to TAF.

TAF: Purchasing power down "temporarily"

Taking inflation and other factors into consideration, purchasing power across all income groups in Finland has declined during the Sipilä administration.

However the association also noted the purchasing power of pensioners effectively increased by 17-19 percent, mainly due to the decrease in taxes since the early 2000s. A person in the workforce earning the average wage of 3,368 euros per month would have seen their purchasing power rise by 36.4 percent over the same period, according to Janne Kalluinen of the Taxpayers' Association.

TAF said it expects the weakened purchasing power of pensioners will only be temporary.

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