3. From paper to digital
In 1996, the Ministry of Finance launched the Tyvi project (an acronym for “information flows from companies to the authorities”), which sought to standardise the information collection processes of different authorities. Earlier, information on the same company was sent to different authorities using different forms, an approach that caused extra work and was prone to errors. Now the information would be collected in electronic format.
The concept behind the system was that companies would send their information electronically to Tyvi operators, which would then forward it to the Tax Administration. After pilots, the first Tyvi information transfers were carried out in 1997.
Tyvi proved its worth. Its adoption was accelerated by an order issued by the Tax Administration in 2004, which obligated companies with more than 40 employees to use the Tyvi service to submit information to the Tax Administration. In 2007, more than 90 per cent of corporate annual returns were already submitted electronically.
Tyvi was free to companies, but the Tax Administration paid the operators for data transfer. This was one of the reasons that spurred the Tax Administration to create its own Ilmoitin.fi service, through which companies could file Tyvi returns without using the Tyvi operators.
Another project that facilitated the collection of corporate data was the Business Information System (BIS), which the Tax Administration prepared in the late 1990s with the Finnish Patent and Registration Office (PRH). The system was launched in spring 2001. After its launch, a company only had to submit one notification to be included in the Prepayment Register, Employer Register, VAT Register and Trade Register, and as being obligated to pay insurance contributions. The authorities received the information on the company on one shared form.
BIS significantly cut down on the red tape involved in setting up companies and submitting notifications of changes. BIS’s free information service (ytj.fi/en), which anyone can use to look up information on companies, was launched in summer 2001. The service includes all public information on companies and organisations entered in the Tax Administration’s registers, the Trade Register and Register of Foundations.
Greater efficiency in electronic information collection thanks to systems such as Tyvi and BIS enabled the Tax Administration to also develop services for individual taxpayers. One example of this was the pre-completed tax return, introduced for 2005 taxation. It combined a tax proposal and traditional tax return, which at that time was still being filled in by more than 1.5 million people. Now all individual taxpayers received a pre-completed tax return based on information collected by the Tax Administration and a shared procedure was introduced for them.
The Tax Administration introduced an electronic transaction environment in 2006. It enabled a standardised approach to providing new e-services. After this, the Tax Administration started launching new interactive services online.
Palkka.fi, the free online service for the payroll calculation, wage payments and official notifications of small employers – whether companies or private individuals – went live after pilot runs in February 2006. Like the Tyvi service for larger employers, it supplemented electronic information collection and facilitated the paperwork of self-employed persons.
An e-service for tax card changes, Tax Card Online, served as a project to pilot interactive services for individual taxpayers. Customers logged into this service with their online banking codes or ID card with a chip, filled in the information on changed income and deductions, and then submitted their order for a tax card. The service had a limited launch in Joensuu, Ostrobothnia and Pirkanmaa in 2006. It went live nationwide at the beginning of the next year. From then onwards, all customers could change their withholding tax online.
Tax Card Online was the Tax Administration’s first interactive service for individual taxpayers. In 2007, its very first year, 200,000 tax card changes were made online.
The Tax Return Online service was launched in spring 2008. In the first phase, taxpayers could report tax-deductible travel expenses. The service was expanded gradually: in 2009, users could report tax credits for domestic help online, along with child support payments and capital gains and losses; in 2010, rental income; and finally in 2011, changes to earned income.
The Tax Return Online service was the culmination of the development process that began with the introduction of the tax proposal in 1995. The Tax Administration wanted to provide a service that inconveniences the customer as little as possible and does not require shuffling paper. For the first time, it was now possible to handle a tax return in an entirely paperless manner. In spring 2019, more than 80 per cent of those who added information to their tax return did so online.