(FINNBAY) – Helsinki, 4 June 2014. Finland has taken the necessary steps to put the firms in line. Pekka Haavisto, Minister for International Development and Minister responsible for state ownership steering explained of the government’s latest action plan to fight against tax evasion on the international level includes a new obligation: companies with the State’s majority shareholding will be obliged to report on their taxes country by country.
“Finnish companies operate more and more often globally and in countries where for example corruption, bribery, use of child labour and environmental problems exist. When companies operate in conditions where risks related to human rights, social conditions or the environment systematically occur they must for their part aim systematically at preventing and rectifying breaches and reporting on their activities openly and actively.” says Haavisto.
Improving the conditions of its global firms, the Ministry for Foreign Affairs in Finland also established an online service that anyone can use to report suspicions of abuse in relation to development cooperation on Tuesday. “Now anyone who suspects abuse involving development cooperation has the opportunity to press the red button, so to speak. Here the Ministry for Foreign Affairs leads the way for the entire state administration,” says Haavisto.
Notification can be given at www.vaarinkaytosilmoitus.fi. The service operates in Finnish, Swedish and English. If necessary, notification can also be given anonymously. The online service intensifies intervening in cases of abuse and improves risk management in development cooperation.
“Taxation practices vary from country to country and create mismatch in the global economy. As a rule, taxes should be paid in the country where the company actually operates. The companies which are under the state ownership steering have reported on their taxes during the past two years,” says Haavisto.
Haavisto believes that, like with other transparency, the new system will have a preventative effect.
“In negotiations on cooperation, too, we emphasize that we have zero tolerance concerning abuse and easy systems available where suspicions of abuse can be reported. The more open the work is, the less temptation there is for any kind of wrongdoing,” says Haavisto. “Many developing countries have improved their own systems to the extent that notification can also be given through them. This is what happened recently in Tanzania. When necessary, misused funds will be recovered.”
The other Nordic countries have a similar notification system in use. The Swedish whistleblower system received 31 notifications in 2012 and the corresponding Norwegian service 35. Denmark has received 90 notifications since 2005.
“As of 2014, the companies with majority shareholding will start to report on the tax data as part of their final accounts. I sincerely hope that state-owned companies would be pioneers in tax reporting and that the Government’s policy-setting would promote this goal,” says Minister Haavisto.