The increase in the value added tax on exercise services arouses criticism, when at the same time exercise is supposed to turn into growth.
Sakari Lund,
Riku Porvari
According to its program, Finland’s new government is launching the Suomi Liikkelle program, which aims to turn movement into growth in every age group. At the same time, however, the value added tax on sports services is being increased from 10 percent to 14 percent.
The government has been criticized for its contradictions. Raising the value-added tax on exercise services hits the promotion of exercise and sports at a time when the exercise industry is still partially recovering from the corona pandemic and is also suffering from high inflation, the Finnish Olympic Committee stated, for example.
Also the entrepreneur of Fitness Center Fit Porttipuisto Jon Währn criticizes the increase in value added tax.
– It doesn’t sound good from the point of view of public health or the national economy. If the value added tax on sports services is increased, it will contribute to reducing the movement of Finns even more. It will have negative effects on both public health and the increase in the cost of immobility on the national economy, Währn said.
– If the tax goes up, the prices will have to be raised, which will probably reduce the number of customers. Inevitably, it does, because money ultimately drives people’s actions. Even if you think it’s not a very big amount, everything makes a difference. If prices rise, a certain number of customers will be left.
In Währn’s opinion, on the contrary, taxation should be lowered if people want to be encouraged to move more. He too sees contradictions in the government’s program.
– Absolutely. This seems like an easy and short-sighted solution. On paper, something is presented that would lead to savings, but it remains a question mark whether there will be any savings in the end. If people buy less services, tax revenues will fall and, in addition, the health costs of inactivity may increase.
According to Währn, companies can even go upside down because of a tax increase. For example, in the case of gyms, the difficult corona years are behind us and now the costs are rising. There would also be a tax increase on top of that.
– It’s such a big one-time increase that this will definitely happen. A lot of companies are already broke, so this could be the last straw.
“It worries whether this will increase inequality”
Director of the Club and Member Activities Unit of the Olympic Committee Jaana Tulla first tells the good things about the government program.
– It is extremely positive that exercise, sports and youth will have their own minister. Sandra Bergqvist can focus on this whole, Tulla stated.
– Another positive thing is the Suomi Liikkeelle program related to Finns’ physical activity and ability to function. It is a great thing to solve the crisis of immobility.
Instead, Tulla also criticizes the increase in value added tax. It came up already in the Olympic Committee’s announcement.
– We understand that the Finnish economy is being put into good shape, and exercise and sports must be part of this. But if the VAT increases and cuts to organizations are implemented while costs are rising and inflation is raging, I am concerned that the ability to operate will deteriorate.
The increase in costs has already caused difficulties for clubs.
– There is a clear signal from the clubs that, for example, accommodation, food and transport costs have increased by up to 30 percent. When you add on top of that, for example, the rising value added tax on sports facilities, it goes directly to hobby fees through the clubs. It worries whether this increases inequality, whether everyone has the same opportunities to practice.
According to Tulla, it is contradictory that according to the government program, taxation is aimed at being clarified, but at the same time, the announcement about the increase in value added tax is confusing.
– I consider it important that the assessment related to taxation be started right away and that we start looking for a solution that would not require an increase in taxation.