Case Verohallinto

The Tax Administration's major project created the Incomes Register, which is a key system in the digitalisation of Finland

The Tax Administration’s Incomes Register – which is used to collect data on the wages and benefits of all citizens – is an important system for the entire country. Digia has implemented the Incomes Register as the government’s classified project with more than 100 Digia employees. The final part of the giant project was completed in early 2021, and the benefits for Finland's digitalisation and society as a whole are considerable.

A few years ago, state administration came up with a major idea related to digitalisation. What if the wage, pension and benefit data of all Finns could be collected into a single database? It would significantly reduce the amount of work throughout the state administration. For example, correct and up-to-date information on people's income would be automatically available for decisions on benefits. There would be benefits for businesses and citizens, as well. Wage data would only have to be reported once and would then be available to all parties who need the data. Many things could be digitalised and automated, and additional work such as pay certificates would no longer be needed.

At the beginning of 2021, this vision became a reality. The Incomes Register was deployed to its full extent when the reporting of pension and benefit data was also started. For wage data, the system was taken into use already at the beginning of 2019.

The amount of data entered into the system gives an idea of the system’s importance to society. According to Terhi Holmström, Director of Incomes Register Unit at the Tax Administration, employers and entrepreneurs submitted more than 100 million reports through the Incomes Register in a period of a few years. Approximately two million pension and benefit data reports were submitted already within the first four days.

The numbers on the data user side were even higher. Holmström says that parties such as Kela, Tax Administration, accident insurance companies and unemployment funds have used the Incomes Register data for more than one billion times within a period of just over two years. One wage data report has therefore been used for ten times on average, which gives an idea of the usefulness of the system.

milla-teimme.pngWhat we used

  • Microsoft technologies
  • This information is not otherwise public

This system has been built not only for the Tax Administration, but for society as a whole. The work has therefore been very meaningful.

Terhi Holmström, Director of Incomes Register Unit at the Tax Administration

Legislation and the classified IT system were developed in parallel

The development of the Incomes Register has been an extremely exceptional project in many ways. During the project, the Tax Administration established a new Incomes Register Unit, and the introduction of various new ways of working was required. The project implementation also required changes to legislation. Holmström says that the legislation applicable to the register was developed in parallel with the technical side of the project.

Over the years, more than one hundred Digia employees participated in the system development. The practical implementation of the project was carried out in three phases. The first phase started at the end of 2016. It focused on the wage reporting functionality for employers, which was introduced in January 2019. After that, focus was on expanding the number of the users of the Incomes Register, with implementation taking place at the beginning of 2020. In the third phase, the functionality of pension and benefit data reporting was added to the system. The entire system was completed in early 2021.

Naturally, there are inevitable challenges in the early stages of such major societal change. Holmström says that the launch of the Incomes Register in 2019 nevertheless went well, considering the scope of the project. When users became familiar with the system, it was even smoother to use. “The deployment of the entire system in 2021 went really well,” says Holmström.

The Incomes Register is a key system for Finnish society, so the information on the technologies or software used in it is not public. However, Holmström can state that the system is not to a major extent based on any off-the-shelf software, even though such software has also been utilised as part of the whole. Most of the Incomes Register was programmed and built by using technologies and applications – including Microsoft technologies – that are also used elsewhere in the Tax Administration's systems.

The entire project was carried out in accordance with the government’s security classification guidelines. This was taken into account in all parts of the project, from architectural design to practical work. The personnel involved in the project has a security clearance, as required by authorities. In addition, work was carried out in state-certified security facilities that Digia has in four different cities. Holmström says that all the sub-entities in the system were required to meet strict data security requirements.

A significant piece of Finland's digitalisation

Holmström says that the Incomes Register provides Finland with various benefits, many of which will only be fully visible in the coming years. The greatest benefits are related to the automation and digitalisation of data processing.

For example, almost real-time income data can speed up decision-making immensely. This brought extraordinary benefits after the start of the COVID-19 pandemic, when there was a sharp increase in the number of people in need of social support. Decisions could be made much faster, as people's up-to-date wage data was available in one place. For example, the collection, sending and manual processing of pay certificates was usually not needed.

At the beginning of 2021, the situation improved further, as pension and benefit data was included in the system. “This brings many benefits to citizens. They receive benefit decisions based on up-to-date information, while the number of rectification decisions and claims for recovery will decrease,” says Holmström. The system also reduces the problem of the black economy and provides the government with new insight into the changes in the Finnish economy almost in real time.

The data reported to the Incomes Register is also used for pension decisions and taxation. All citizens now have easy access to their own up-to-date income data. For example, in the best-case scenario, ordering your tax card with correct information can now be done with a few clicks.

Holmström is particularly pleased with how far automation has come. “Already 96.8 per cent of all notifications are received through the interface. It is amazing that such a large part of the data is automatically transferred between systems,” Holmström says. Pursuant to legislation, wages and benefits must be reported within five days, but most of the reports are received already before the deadline.

“The deployment of new interfaces was highly successful. In the past, the Tax Administration has not really offered such interfaces for customers’ use. Their number is now being increased because it was so successful in the case of the Incomes Register,” says Holmström.

Huge project completed on budget and within the agreed schedule

Holmström says that the giant project, which lasted for approximately four years, has been a complex package. However, the project was completed within the planned budget and on schedule.

After the project completion, Digia is responsible for the maintenance of the application and system and for the service management in cooperation with the Tax Administration. As this is a system that is crucial to society, it must be available on a 24/7 basis. The system is operated and maintained entirely in Finland.

Holmström says that the development of the Incomes Register will not stop here, but that the development of the system and its applications will continue. For example, there are plans to add new user groups within the limits of the changing legislation. A large number of Digia’s experts are also involved in this further development work.

Implementing such a large-scale project in society on schedule and within budget is an excellent achievement from both the Tax Administration and those involved in the project. However, the Tax Administration considers it most important that the completed system is of high quality and serves users well. The project thus cooperated extensively with users and various stakeholders.

“This system has been built not only for the Tax Administration, but for society as a whole. The work has therefore been very meaningful,” says Holmström.