[Exploring Finland's Innovation Ecosystem]④"Jealousy Day" of Nationwide Tax Disclosure Builds Trust

70% of Finns Say They Are "Happy" to Pay Taxes

A Social Safety Net Supported by Taxation

Fostering a Virtuous Cycle of Innovation and Growth

The reason Finland, with its small population of 5.5 million, has managed to stand out on the world stage is because a well-established social safety net has functioned alongside its economic growth policies. Even if someone failed at starting a business or lost their job, they were protected through various social safety net programs such as unemployment benefits. Welfare has created a virtuous cycle of innovation and growth.

Signe Jauhiainen, Senior Researcher at the Finnish Social Security Institution (Kela), said in an interview on the 24th (local time), "Trust, information, and efficiency are the cornerstones of the Social Security Institution." She added, "Our long-standing mission is to 'be with you in life and support you during difficult times.'"

Signe Jauhiainen, Senior Researcher at the Finnish Social Insurance Institution (Kela), said in an interview at the Helsinki headquarters on the 24th (local time), "I believe that social safety nets build trust so that people can live without great worries or fear of risks." Photo by Lee Hyunju

The Finnish Social Security Institution is a government agency responsible for administering unemployment benefits, maternity allowances, housing allowances, health insurance, and the national pension. Researcher Jauhiainen stated, "I believe social safety nets build trust so that people can live without great worries or fear of risks." She explained, "The fact that income is guaranteed to some extent even if you lose your job helps build trust. While trust in the institution is important, trust between people is also vital."

The Finnish government pursues comprehensive welfare so that anyone living in Finland can benefit. Unemployment benefits are income-linked allowances, and after working for 12 months, a person can receive 50–60% of their previous salary (at least 930 euros per month). Housing allowances are also provided separately. This is different from other European countries such as Germany, which provide housing space directly, as Finland offers direct support for housing costs. If certain conditions are met, self-employed people can also receive unemployment allowances, and those who fail in starting a business can apply for allowances from the Social Security Institution. Even in situations where you do not meet the requirements to receive any unemployment benefits, you can receive social assistance to guarantee a minimum standard of living. This assistance is available to adults whose income falls below the minimum subsistence level, which is about 590 euros per month. However, as Finland’s unemployment rate has recently risen, the criteria for receiving unemployment benefits have become somewhat stricter. If the period of unemployment continues, unemployment allowances may be partially reduced, and job seekers must apply for jobs at least four times a month.

Merja Kauhanen, Senior Researcher at the Labour Economics Research Institute (Labore), said, "In Finland, there are quite a few people who combine wage work and self-employment, so we are pursuing a major reform of social insurance to distinguish between the two." She continued, "Finland's social safety net is very good for all groups, and it remains so today." She also explained, "In the past, most Nokia employees had sufficient work experience, so of course they were eligible to receive unemployment benefits. If someone wanted to start a business at that time, there were also startup support programs, which would have been very helpful in launching new ventures."

Merja Kauhanen, Senior Researcher at the Labour Institute for Economic Research (Labore), emphasized on the 23rd (local time) at the institute located in Helsinki, Finland, that "Finnish welfare means no one is left alone." Photo by Lee Hyun-Joo

This kind of social safety net is possible because citizens pay a lot in taxes. Since World War II, the Finnish government has aimed to build a welfare state, and people feel they get back as much as they pay in taxes. As a result, tax resistance is very low. According to the Finnish Tax Administration, 70% of Finnish citizens said they are "happy" to pay taxes.

The Finnish Tax Administration releases the previous year's tax information on the first business day of November every year. This day, also known as "Jealousy Day," allows anyone to check the income, taxes, and assets of their neighbors. The Tax Administration considers transparency to be an important value and strives to help people understand the tax system, its meaning, and the impact taxes have on society.

Veijo Romppainen, Director of the Business Division at the Finnish Tax Administration, said, "For most wage earners, tax returns are automatically pre-filled, and value-added tax is also automated. The same applies to companies— all data flows automatically between organizations and systems. The key is to develop processes focused on customer needs."

This content was produced with the assistance of AI translation services.