MuniFin Green Finance and Liquidity Portfolio Evaluation
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11
Finnish municipalities: Strong revenue base and
close link to Central Government
Revenues (~EUR 47 billion)
By law, a Finnish municipality cannot be declared bankrupt
• Bankruptcy Act (120/2004)
Close link to the Central Government
.
• All Finnish municipalities are highly independent and have a parallel
status with the Central government confirmed in the constitution
dating from 1917
•
Large reform in the healthcare sector in process
Borrowing
9%
Central
government
transfers to
local
government
18%
Other
Other Taxes 5%
8%
Sales of
Services
20%
Income Tax
40%
Expenditure (~EUR 47 billion)
Strong revenue base
•
•
Municipalities have an unlimited right to levy taxes on their
inhabitants (municipal tax rate)
Other revenues taxation related charges from service production
Budget control
• Ministry of Finance is responsible for monitoring the municipal
sector
.
By law municipalities have an obligation to balance their finances
over a four-year time frame
Other Duties
17%
Education
and Culture
31%
Financing
costs
5%
Social and
Healthcare
48%
Source: Association of Finnish Local and Regional
Authorities, figures for year 2019View entire presentation