Photo: ICPonline
- Next Article Job openings in Finland fall below Covid-era levels
Associations and foundations in Finland received over €100 million in state aid last year despite having links to tax debts, business bans, or default records, according to the Finnish Tax Administration.
A report by the Grey Economy Information Unit found that in 2023, €124 million in government grants could have been withheld if a proper financial reliability check had been carried out. The assessment covered both the organisations and individuals responsible for them.
In total, every fifth association and every second foundation that received support last year would have failed a financial reliability check, based on existing criteria proposed in 2022 for reforming the Act on Discretionary Government Grants.
Janne Marttinen, Head of the Grey Economy Information Unit, questioned the current use of public funds. “There are nearly a thousand associations and foundations in Finland with such persons in charge whose personal or business finances are a mess,” he said. “This increases the risk that the association also operates in the grey economy and that taxes and charges are left unpaid.”
The report states that over €500,000 in grants were issued in 2023 to organisations led by individuals who were banned from running businesses. Current law does not require authorities to assess the financial reliability of grant applicants or their leadership.
In 2023, around 4,200 associations and 300 foundations received a total of €300 million in various government supports. These included business subsidies and employment-related grants. The report notes that while some grant providers have internal rules on checking applicants’ backgrounds, there is no legal obligation to carry out such checks.
The Grey Economy Information Unit has reviewed how the proposed legislative changes would have altered last year’s grant decisions. The new rules, still under preparation, aim to prevent the awarding of support to any applicant, responsible person, or associated business with unpaid taxes or unresolved public liabilities.
“A proper background check encourages organisations to meet their obligations and reduces the risk of public money being misused,” said Marttinen.
The proposal to amend the Act on Discretionary Government Grants is expected to be submitted to Parliament in autumn 2026.
A separate report by the same unit examined money collection permits issued in March 2025. If financial reliability had been used as a criterion, around 15 percent of applicants would have been disqualified.
Marttinen said the current system allows organisations with poor financial records to receive money collection permits, which poses a risk. “Cases of money collection scams have come to light. While criminal convictions can lead to rejections, financial issues such as tax debts are not considered,” he said.
The National Police Board of Finland issues these permits. The Grey Economy Information Unit recommends that financial reliability checks should become a requirement for issuing permits.
Assessing the financial health of many associations remains difficult due to a lack of data. Associations are not always required to file tax returns or submit financial statements. Between 2020 and 2022, 40 percent of associations failed to file a tax return, either due to lack of taxable activity or other reasons.
Marttinen said that this gap makes it essential to evaluate the financial backgrounds of responsible individuals and any associated companies.
HT
- Next Article Job openings in Finland fall below Covid-era levels
Source: www.helsinkitimes.fi
