Urpilainen was responding to concerns raised by the Federation of Finnish Commerce, which worries that the tax hike will dry up consumption and in turn cause job losses.
“According to the calculations we have used as the basis for our decisions, that likelihood is small,” the minister said, referring to the unease expressed by the Federation.
“In my opinion it was a compromise that could be accepted in this difficult situation, particularly since the majority of new tax income will come from other sources that are not equally applied,” Urpilainen said of the tax increase in a YLE radio interview Friday.
Urpilainen said she did not believe that an increase in prices would have a direct effect on employment and consumption, noting that at the same time, low income earners would receive support by way of higher personal allowances and income deductions, thus preserving their buying power.