New study: Energy tax refunds inefficient

VATT found no correlation in its recent study between energy tax refunds and competiveness indicators.

The study focused on the 2011 energy tax reform. VATT analysed how the approximately EUR 200 million returned to industry in the form of energy tax refunds affected several competitiveness indicators and how the changes in the taxation on motor fuels impacted consumer prices.

Tax refunds had no impact on business performance

A statistical analysis revealed no correlation between energy tax refunds and competiveness indicators. Consequently, the tax refunds had no impact on the companies’ success or lack of it.

According to the study, energy tax refunds may distort competition because they only apply to select fields of activity and only the largest companies within these fields. While large corporations may recoup over 80 per cent of the energy taxes paid, small companies in the same line of business receive much less or nothing.

Close to 85 per cent of all refunds go to paper, chemical and forestry companies. Many of them are large international corporations.

The study is based on detailed data on all the companies affected by energy tax cuts during 2010–2014. VATT’s analysis focused on seven competitiveness indicators: productivity, turnover, net profit margin, return on equity, value of exports, number of employees and the percentage of exports of total turnover.

Consumers pay 70 per cent of all increases on motor fuels

In the second part of its report, VATT analysed the impact of the changes to motor fuel taxation on consumer prices. At the beginning of 2012, the excise tax was increased by 10.55 cents per litre for diesel fuels and 2.34 cents per litre for petrol.

According to the study, about 70 per cent of the increase in diesel tax was passed on to consumer prices. Additionally, the study shows that the sales of taxed diesel fuel increased sharply just before the tax hike, meaning that people clearly anticipated the rise.

The report was prepared as part of the implementation of the Government Plan for Analysis, Assessment and Research for 2015.

Research report: Assessments of the 2011 energy tax reform (in Finnish)

For further information on the Government's analysis and research activities, see


Research Leader Marita Laukkanen, +358 295 519 429
Senior Researcher Kimmo Ollikka, +358 295 519 437
Senior Researcher Saara Tamminen, +358 295 519 450
Senior Researcher Jarkko Harju, +358 295 519 410