The personnel fund system, initially designed to encourage long-term investment and people’s capitalism within companies, has been used for large-scale tax avoidance by some high-income earners. Experts have been uncertain about the interpretation of new tax guidelines released on March 26, leading to debate and speculation behind the scenes. However, clarification from tax lawyer Tero Määttä has helped shed light on the situation.
Tens of thousands of ordinary employees have utilized the personnel fund system to receive tax incentives for investing and saving for their future. Some companies have taken advantage of loopholes in the system to avoid taxes, sparking controversy and calls for stricter regulations and limits on the amount that can be invested tax-free in personnel funds.
Implementing reasonable limits on tax-free investments could help prevent further exploitation of the system and ensure that it serves its intended purpose. However, some argue that reform or potentially abolishing the system altogether may be necessary due to ongoing debates and issues surrounding its implementation. The purpose of the personnel fund system is being threatened by greed and tax avoidance schemes, prompting a call for balance between tax incentives and preventing abuse.