Saturday, October 24, 2015

A half-baked approach?


This news is a couple of weeks old, but it's just come to my notice.

Police [in Finland] are requesting citizens to inform them of pizzerias that offer their meals at less than 6 euros [about US $6.60] each. Their campaign is directed mainly at social media, where people have been quick to ridicule the seemingly trivial measure, but one which the authorities say is the first decisive step towards rooting out the country's grey economy.

"We need tips from citizens. You can post them on our web site or contact us on social media. Unless a pizza is on temporary sale there is no way a legitimate establishment can offer pizza at less than 6 euros," claims Minna Immonen from the Uusimaa police department.

. . .

The few weeks the campaign is scheduled to last will be followed by further measures to combat the grey economy and unlawful financial activities. Police say that instead of arousing outrage their pizza campaign should entice the public to work with them, not least of all because the issue represents millions of dodged tax euros.

"It's important to remind people that a low price is not the only indicator, and that not being offered or given a receipt is another red flag people should be aware of," says Immonen. "As nice as a cheap pizza seems, especially with food prices as high as they are, too cheap and it makes it possible for some entrepreneurs to hatch money-grabbing schemes."

There's more at the link.

When I first read this report, I was nonplussed.  Why would anyone in his right mind report a pizzeria for selling cheap pizza?  Surely he'd simply take advantage of the low price?  Puzzled, I contacted a Finnish friend of mine who's now living elsewhere.  She pointed out that the mindset in Finland is very different to that in some other countries, particularly the USA and the UK.  She said that Finland's 'welfare state' programs rely on taxation to fund them, so cheating on taxes is publicly portrayed - not just by the government, but by many news media as well - as also cheating those in need who are supported by those programs.  From that point of view, she says, the campaign makes perfect sense.

I don't see it that way, of course.  I'd prefer to have most welfare programs cater for only the bare essentials, and encourage participants - by their threadbare nature - to get back on their own two feet as quickly as possible so as to earn their way to a better life, rather than have it handed to them at taxpayer expense.  However, that's apparently not the way many Finns see it.  Different strokes for different folks, I guess . . .

(Nevertheless, if I ever visit Finland and get the chance to buy a decent pizza on the cheap, I'm highly unlikely to do anything other than wolf it down!)

Peter

13 comments:

Tony Tsquared said...

Discount pricing with no receipt of pizza and donner by shops have been going on ever since the tax rates went through the roof all through the EU. I have a friend who had a pizza shop in Denmark that sold out last year and moved back to the states (his wife is Dannish). He told me the taxes took all his profits. The only way he kept the business going was to sell under the table and not report his actual sells so he could avoid paying the exorbitant taxes.

Gorges Smythe said...

I guess SOME folks really DO love their socialism!

Anonymous said...

In my area paying cash to small businesses gets you pretty good discounts. I know someone who saved a hundred bucks recently on new tractor tires by paying cash. When buying a car in cash from a trusted person the actual selling price is never disclosed to the dmv. They collect a tax based on the purchase price so you pick something semi-believable but don't tell them what you really paid. To save on the exorbitant taxes on new pickups a regular cottage industry has cropped up that takes rolled or cosmetically totalled new pickups and puts 20 or 30 year old cabs and beds on them. VIN is on the dash of the old truck so that's what it's registered as. Saves you thousands in taxes and insurance.

Sunnybrook Farm said...

I just bought a new battery with no receipt and cash with a good discount. They just waste the money anyway, why give it to them, it is the only way at present that I can revolt against this socialist government.

Duke of URL VFM#391 said...

Curious - So how much IS the Finnish tax on a E6 pizza?

richard mcenroe said...

Wolf that pizza down and you'll be charged with destroying evidence.

raven said...

Wait till they get a half million of so "refugee's" on the dole and see if the Finn's are still happy to be paying through the nose to support them....
The purported success of the northern European welfare states was predicated on "us supporting us", not "us supporting them".
Lose that unified sense of culture and all it's shared values and the welfare state falls on it's face.

richard mcenroe said...

The migrants already took one look at Finland and turned around. Just as well. It's a small country and arson fixin's are expensive.

drjim said...

One of the small electronics shops I go to gives a substantial discount for "cash, no receipt", usually on the order of 30%.

richard mcenroe said...
This comment has been removed by the author.
richard mcenroe said...

Laws make criminals.

Coconut said...

When you put a tax in, it places a wedge between the price a buyer pays and the price the seller recieves, and the general effect of that is to shift the demand curve back.

People in the field can still make money, but some, and often many, of the existing people have to go bust first.

If they don't want to give it up, the only way to keep going is to... ignore the tax completely. Which allows them to keep charging the same old cost - or less, if they also throw out the other taxes, which they probably will, for charging GST on an illegal sale isn't very clever.

Which means the people who DO pay the tax are likely to slowly go bust themselves unless they can find a way to cut costs dramatically.

Taxes self-incentivise against themselves; it's not a problem with small taxes- people gripe, but cheating isn't worth the risk and effort -but if there's too many or too much...

richard mcenroe said...

Have they started hunting for the looters, wreckers, hoarders and saboteurs yet?