Compulsory taxation ID
requirement for construction workers targets the grey economy
Helsinki (05.09.2012 - Juhani
Artto) All workers at new construction sites in Finland must now have
identification documents containing their personal taxation numbers, under
new legislation that came into force on 1 September 2012. Workers at older
construction sites must have such ID by 1 March 2013. Foreign workers are
not exempted from the new rules.
These novel regulations
may become the most powerful weapon available to the Finnish authorities in
their struggle against the grey economy. Over the last decade illicit
employment practices have spread alarmingly through Finland’s construction
sector. This has made it more difficult for honest companies to win tenders,
and deprived the authorities of hundreds of millions of euros in unpaid
taxes and social security contributions. Both Finnish and foreign companies
have been involved in such illegalities.
The revised legislation
additionally compels contractors to check that sub-contractors meet their
obligations towards their employees.
A statement released by
the Finnish taxation and employment authorities emphasized that in future
all construction contracts must require building contractors to comply with
the minimum employment conditions defined in legislation and collective
agreements. These conditions cover fundamental issues including pay, working
hours and holidays.
The new rules form part of
a wider Finnish Government action plan designed to combat the grey economy.