FINLAND: Tax officials capitalise on university reform
Finnish government-funded institutions (including universities) are exempt from paying all forms of taxation, and although post-reform universities will continue to receive the bulk of their funding from the government, the Finnish tax office is reassessing their tax status.
According to tax officials from the Ministry of Finance, universities will no longer fall under the current regulations because of their new 'entrepreneurial' status. This is an almost bizarre interpretation, because the intention of the reform is to improve universities' financial situation. Finland's tax administration is claiming that some of the paid services provided by universities constitute 'business activity' and therefore fall within taxation legislation.
Along with teaching and research, Finnish universities are required by legislation to undertake the so-called 'third task', which is interaction with society.
Continuing education is a major component of the 'third task' and is one area being targeted by the Finnish tax man. Much continuing education is conducted and paid for by the government-funded sector, particularly programmes run for teachers and for the unemployed. In fact, only a small number of continuing education programmes offered by universities could be classified as 'business activity', and only a fraction of those are in competition with the private sector.
Another so-called business activity being targeted is the veterinary service provided by the University of Helsinki, Finland's only veterinary medicine school. The animal hospital charges market fees for its public services so as not to compete unfairly against private veterinary practices.
Each of its veterinary surgeons has three roles - as vet, teacher and researcher - and when a 'patient' is treated students are present, receiving teaching and training at the same time. The revenue from this 'business activity' is not sufficient to cover costs and the animal hospital is heavily subsidised by the Ministry of Education.
Other paid services to be redefined as 'business activity' include conference fees and fees paid by academic staff and students for accommodation at outlying research stations. These are not renowned as big money spinners; universities nearly always have to contribute in some way in order to keep the fees affordable.
In this instance, the Ministry of Education is likely to side with universities against its colleagues in the Ministry of Finance.
The Finnish government seems to have been unable to coordinate its ministries to provide mutual support rather than working against each other. It is strange that the potential ramifications and other issues were not sorted out long before the new University Act was drafted. A large majority of MPs voted in favour of the legislation, but the message seems not to have reached some of the civil servants in the Ministry of Finance.
* Dr Ian Dobson is Helsinki correspondent for University World News. An Australian scholar often based in Finland, he is editor of the journal Australian Universities' Review, an honorary researcher with Monash University's Centre for Population and Urban Research in Melbourne, and the Australasian representative of the Educational Policy Institute.