Finland's SDP proposes defense tax to fund rising military costs

The Social Democratic Party (SDP) of Finland has proposed the introduction of a temporary defense tax to fund the country’s rapidly increasing military expenditures. The proposal aims to raise approximately five billion euros over the next five years to support defense investments, such as F-35 fighter jets, Pohjanmaa-class corvettes, and new air defense systems.

SDP Chairperson Antti Lindtman stated that while there is broad consensus on the need to strengthen national defense, parties differ on how to finance it. The SDP’s model seeks to distribute the financial burden equitably rather than through cuts to welfare services. The proposed tax model consists of three components: a temporary income tax surcharge for high earners, a one percentage point increase in capital gains tax, and a temporary 0.5 percentage point increase in value-added tax (VAT) rates.

The proposal is expected to become a significant economic and political issue leading up to the 2027 parliamentary elections.