Finland: taxes hampering the media

Although Finland is ranked fourth in Reporters Without Borders’ Press Freedom Index, here too, political influence has reared its ugly head in recent years.

Media company Sanoma in Helsinki (© picture-alliance/dpa)
Media company Sanoma in Helsinki (© picture-alliance/dpa)
The public broadcaster Yle was plunged into a serious crisis at the end of 2016: it had reported on a state cash injection for the financially ailing Terrafame group. The decision to help the group should have prompted Prime Minister Sipilä to declare a conflict of interests, Yle (as well as other media) had argued. But then Yle’s senior editors put a halt to any further critical reporting on the issue. This sudden silence was allegedly the result of pressure from Sipilä, who, however, denies any involvement. Several well-known Yle journalists resigned in the aftermath, and in May 2017 Yle’s editor-in-chief also left his post.

The media crisis and the upheavals in the media landscape are a subject of constant debate in Finland. Two controversial pieces of tax legislation were discussed particularly heatedly: the introduction of VAT for print products in 2012, initially 9, now 10 percent, and a year later the so-called Yle tax, named after Finland's radio and television broadcaster, which replaced the television licence fee based on ownership of a TV receiver. The newspaper publishers hold the introduction of VAT partly responsible for the decline in circulation, and even politicians in the governing party are now demanding that the rate at least be reduced.

In the meantime the introduction of VAT on print products has proved to be a bad idea for the state, too. While in 2013 the tax generated 21 million euros for state coffers, by 2015 that figure had fallen to 15 million - due to the discovery of a legal loophole. Now the media companies A-Lehdet and Sanoma both distribute their newspapers from Norway because if they are not distributed from an EU country subscriptions are VAT-free.

Despite the overall decline in circulation the Finns continue to be avid newspaper readers, with 298 copies sold per 1,000 inhabitants (2014). Finland thus ranks fifth worldwide in terms of newspaper readers.

The Finnish media landscape is characterised by a high level of concentration. Two media companies, Sanoma and Alma Media, control the majority of dailies, and both also have assets in television, radio and the Internet. By far the most influential and highest-circulation newspaper is Helsingin Sanomat, published by the Sanoma group. Alongside Finnish newspapers there are also a number of Swedish-language newspapers for the Swedish minority.

In recent years publishers have increasingly worked together in order to cut costs. In 2014 twelve regional newspapers signed a cooperation agreement which provides for the generation of press content that can be used for print media and the Internet simultaneously. In addition the publishers have significantly expanded their online activities and have recorded a big increase in revenues from Internet advertising. Many of them are also charging for access to some or all of their coverage.

In this way Helsingin Sanomat was able to increase its circulation again for the first time in 2017 after years of decline. Any further decline in print circulation was offset by new online subscribers. As publishers and private broadcasters strengthen their position on the Internet, criticism is growing of the tax-financed public broadcaster Yle, which provides free news and films and hence competition for private media companies.

Press Freedom Index (Reporters Without Borders):
Rank 4 (2018)

Last updated: May 2018
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