Orpo's government agrees final state budget, emphasis on defence and economic growth
A series of measures will see tax cuts for middle-income earners as well as corporations from the start of next year, while funding for integration services will be further cut.
On Tuesday, Prime Minister Petteri Orpo's (NCP) government reached an agreement on its budget proposal for 2027 at the House of the Estates in Helsinki. This would be the final budget of this government term, as Finland is scheduled for parliamentary elections next year. The coalition's budget has a deficit of 12.4 billion euros, mainly due to debt interest payments and investments in defence and security.
Prime Minister Orpo's administration initially focused on balancing the budget and reducing national debt, but the current proposal has a deficit despite a growing Finnish economy and improved outlook for businesses and households. The security concerns arising from Russia's aggression towards Ukraine have led to a 618 million euro increase in the Ministry of Defence's funding, including 1.3 billion euros for defense materiel and an additional 186 million euros for operational expenses.
Other areas like healthcare, social sector grants, and state subsidies to municipalities will face significant cuts, while corporate tax will be reduced from 20% to 18%, resulting in a 850 million euro revenue loss. Additionally, a tourist tax is being introduced, and the UKK Institute's funding will be reduced from 900,000 euros to 800,000 euros.
Written by urgent.news from Yle News Finland's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
