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Finland mulls taxing unpaid labour

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(Globalpost/GlobalPost)

Finland's tax authority is trying to find new ways to increase revenue and is considering going so far as to tax unpaid labour, an official told public broadcaster YLE on Wednesday.

The tax office was looking at service exchanges in particular, such as time banking, where reciprocal services are exchanged using units of time as currency, or more informal arrangements such as that between two neighbours.

"If the neighbourhood electrician and carpenter are involved in each other's private house construction the value of the work performance is already quite high. It would be extraordinary if neither of their work would be taxed," a leading tax expert from the Finnish Tax Administration, Sami Varonen, told YLE.

He said it didn't matter that not a single cent had been paid.

"The value must be determined and declared to be taxed," he said.

"We have a tax deficit due to many causes, but the most serious problems are in sectors that deliberately want to avoid taxes and also function this way," Varonen said.

"The alarm clock should ring ... when somebody does some work and at the same time agrees to pay or give something as compensation. Then one needs to start to find out what obligations result from it," he added.

Despite a stalled economy, Finland is trying to eliminate its budget deficit which the government has forecasted at 1.5 percent of gross domestic product this year.

The Nordic country is the last of the 17 eurozone nations to hold a "triple A" rating with a "stable" outlook at the three main credit rating institutes.

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http://www.globalpost.com/dispatch/news/afp/130320/finland-mulls-taxing-unpaid-labour