HELSINKI, Sept. 3 (Xinhua) -- The Finnish government unveiled its budget proposal for 2026, aiming to support a fragile economic recovery with tax relief and investment incentives while tightening finances to stabilize the country's debt.
According to a government press release issued on Wednesday, total appropriations for 2026 are set at about 90.3 billion euros (105.45 billion U.S. dollars), around 200 million euros more than in 2025. The deficit is projected at 11.0 billion euros, narrowing by 2.3 billion euros from this year when excluding one-off items.
The budget plan eases taxes for households by cutting income taxation for low- and middle-income earners by 520 million euros, lowering the top marginal tax rate to around 52 percent and reducing value-added tax on commodities from 14 to 13.5 percent. Corporate income tax is slated to fall to 18 percent in 2027 to strengthen competitiveness. The government said these measures will boost spending power, improve conditions for entrepreneurship and encourage investment.
To promote employment, the government will launch a 30-million-euro youth employment voucher and expand support for construction through housing loan subsidies and guarantees. Additional funding will go into research, development and transport infrastructure, with Business Finland and universities among the beneficiaries.
Alongside growth measures, the government pledged to rein in borrowing. It has already agreed on steps worth around 9 billion euros to strengthen public finances, and in this budget, added a further 1 billion euros of savings and revenue measures by 2027. These will target selected business subsidies, official development assistance for foreign countries, healthcare reimbursements and excise duties, while avoiding cuts to pensions, child benefits or core welfare services.
"Although Finland's economic growth has been slow, the economy is already showing many positive signs," Prime Minister Petteri Orpo said, noting stronger order books and rising investments. He added that the decisions taken "will further strengthen Finnish people's confidence in the economy."
Meanwhile, the government reiterated that stabilising the general government debt ratio by the end of the government term is one of the most important fiscal policy objectives. Without the measures, Finland's indebtedness would increase beyond control, warned the government.
The budget proposal eventually decided by the Finnish government dropped several high-profile policy vistas announced by Finance Minister Riikka Purra in August, including her plan to dissolve the Finnish National Education Agency and major cutbacks in state financing for voluntary health and welfare work.
The proposal will be submitted to parliament on Sept. 22, together with the Ministry of Finance's latest economic survey. (1 euro = 1.17 U.S. dollar) ■
