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Many firms still unprepared for centralised incomes register rollout

A national database for wages and earnings information will be launched on 1 January 2019, requiring employers and benefit providers to report earnings data.

Seteleitä ja pyykkipoika.
A recent survey showed that most firms were not yet ready to contribute to the new incomes database. Image: Ismo Pekkarinen / AOP

Finland's Tax Administration has spearheaded a large scale project to collect all of the country's wages and earnings information in a central database. The proposed Incomes Register will be launched on 1 January 2019.

A survey conducted by pension firm Ilmarinen in September found that most of the 4,000 firms that responded had not yet made the necessary preparations for the register rollout.

"Accounting firms are already quite well prepared. I think there's a lot of room for improvement when it comes to smaller firms in different sectors. There are plenty of entrepreneurs out there that aren't even aware of the incomes register project and haven't prepared significantly," says Sanna Linna-Aro, head of tax affairs at the Federation of Finnish Enterprises, the largest federation of business owners in the country.

Avoiding mountains of paperwork

Once the Incomes Register is established, businesses and benefits providers will be required to submit employee wages and earnings directly to the register, which the Tax Administration, the social benefits agency Kela, and several earnings-related pension providers can then access in real-time. The national income register is intended to replace the semi-annual reporting burden employers now face.

Agencies using the information will increase in 2020 to include agencies and institutions overseen by the employment ministry, Statistics Finland, unemployment funds and occupational safety and health authorities, among others.

If everything goes according to plan, wage and salary earners and benefit recipients in Finland won't notice a thing, but employers and benefit administrators will avoid mountains of paperwork – as so many public authorities will be privy to the register information.

"There are still two months to prepare. Accounting firms and software developers have already put in a lot of hours, so I think we'll be able to stick to our schedule," says Terhi Holmström, director of the Incomes Register project for the Tax Administration

Employees will be able to review their income information on the register and workers who receive income from several sources should be able to see all of their earnings data collated in one place in real-time.

"Next year will be very significant for the project, as we begin to see how it works and what kind of services it offers. Everyone using the data will gain experience with it, too, so we will see how we can made certain processes even more efficient based on real-time data," Holmström says.

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