A progressive tax scale for municipalities is an option that should be considered, said Finland's Finance Minister Antti Kalliomaki in an interview published on Sunday. "It should be discussed, it should be on the table," Kalliomaki said to newspapers Turun Sanomat and Aamulehti. In Finland state taxes are progressive, but local governments have flat tax rates. Kalliomaki also repeated the government would probably not reach balance for central government spending by 2007, when the term for current government ends.

Finland's public finances, which include central and local government finances as well as employment pension funds, are one of the strongest in the euro area and seen remaining at a surplus of around 2 percent of expected gross domestic product (GDP) in the coming few years.

But with the population ageing at one of the fastest rates globally, Finland has continued to cut taxes since 1996 to boost economic growth and create jobs to shore up its public finances.

Copyright Reuters, 2005