Concepts and definitions
- Actual social contributions
Actual social contributions (D.611) include:
a) employers' actual social contributions. Employers' actual social contributions are paid by employers to social security funds, insurance enterprises or autonomous as well as non autonomous pension funds administering social insurance schemes to secure social benefits for their employees. E.g. employers' unemployment insurance contribution, employers' pension insurance contribution, employers' social security contribution.
b) employees' social contributions. These are social contributions payable by employees to social security. Employees' social contributions consist of the actual contributions payable. E.g. employees' unemployment insurance premium, employees' pension insurance premium, employees' national pension insurance premium, employees' sickness insurance premium.
c) social contributions by self-employed and non-employed persons. these are social contributions payable for their own benefit by persons who are not employees - namely, self-employed persons (employers or own-account workers), or non-employed persons. E.g. entrepreneurs' pension insurance premiums.
- Adjustment for seasonal variation
Seasonal adjustment means the estimation of seasonal variation and the elimination of its impact from a time series. The obtained result is a seasonally adjusted time series. The trend of a time series is obtained when both seasonal variation and irregular random variation are eliminated from a time series. Trading or working day adjusted series are in turn obtained when the factors caused by the variation in the number of trading days or weekdays is eliminated from the observation of the original time series. The Tramo/Seats method is used for the seasonal adjustment of time series at Statistics Finland. In the Tramo/Seats method, preadjustment is based on a regression model (which allows for outlying observations, public holidays and the weekday structure) and the seasonal adjustment proper on an ARIMA model constructed for the time series.
- Capital taxes
Capital taxes (D.91) consist of taxes levied at irregular and very infrequent intervals on the values of the assets or net worth owned by institutional units or on the values of assets transferred between institutional units as a result of legacies, gifts inter vivos or other transfers. E.g. inheritance taxes and taxes on gifts.
- Capital transfers
Capital transfers (D.9) are different from current transfers by the fact that they involve the acquisition or disposal of an asset, or assets, by at least one of the parties to the transaction. Whether made in cash or in kind, they should result in a commensurate change in the financial, or non-financial, assets shown in the balance sheets of one or both parties to the transaction. (EKT 1995 4.145-4.167)
Capital transfers cover
a) Capital taxes (D.91), which consist of taxes levied at irregular and very infrequent intervals on the values of the assets or net worth owned by institutional units or on the values of assets transferred between institutional units as a result of legacies, gifts inter vivos or other transfers, e.g. inheritance taxes, death duties and taxes on gifts inter vivos. (EKT 1995 4.148-4.151)
b) investment grants (D.92), which consist of capital transfers in cash or in kind made by governments or by the rest of the world to other resident or non-resident institutional units to finance all or part of the costs of their acquiring fixed assets. Investment grants in kind consist of transfers of transport equipment, machinery and other equipment by governments to other resident or non-resident units and also the direct provision of buildings or other structures for resident or non-resident units. (EKT 1995 4.152-4.163)
c) other capital transfers (D.99), which include transfers other than investment grants and capital taxes which do not themselves redistribute income but redistribute saving or wealth among the different sectors or sub-sectors of the economy or the rest of the world. (EKT 1995 4.145-4.167)
- Compensation of employees
Compensation of employees (D.1) is defined as the total remuneration, in cash or in kind, payable by an employer to an employee in return for work done by the latter during the accounting period.
Compensation of employees is broken down into:
a) wages and salaries (D.11): wages and salaries in cash; wages and salaries in kind;
b) employers’ social contributions (D.12): employers’ actual social contributions (D.121); employers’ imputed social contributions (D.122).
(ESA 1995 4.02)- Consumption of fixed capital
Consumption of fixed capital (K.1) represents the amount of fixed assets used up, during the period under consideration, as a result of normal wear and tear and foreseeable obsolescence, including a provision for losses of fixed assets as a result of accidental damage which can be insured against. (ESA 1995 6.02)
Consumption of fixed capital should be distinguished from the depreciation shown in business accounts. Consumption of fixed capital represents the amount of fixed assets used up, during the period under consideration. Consumption of fixed capital is estimated on the basis of the stock of fixed assets and the probable average economic life of the different categories of those goods.
- General government
The term "general government" in ESA 1995 denotes the public sector and includes central government, (federal) constituent states, local government, and social security funds. The Finnish general government sector includes the State, municipalities and intermunicipal authorities, the regional government of the Åland Islands, and social security funds. Unincorporated market producer enterprises owned by the state or municipalities are not included. The state sector includes the state budget economy and extra-budgetary funds.
Social security funds include all institutional units that administer the statutory social security system, such as the Social Insurance Institution, the Unemployment Insurance Fund, funds that manage unemployment and disability schemes, as well as companies, pension institutions, pension funds and public institutions (e.g. the Local Government Pensions Institution) that manage statutory employment pension insurance schemes. Finnish employment pension institutions are classified into the general government sector according to a decision given by the European Commission in January of 1997.
Not included in employment pension institutions are funds and foundations that manage voluntary pension. Prior to the statistical year 2000 these so-called "A" pension funds and foundations and the "A" parts of "AB" pension funds and foundations could not be separately itemised from data gathered from employment pension institutions.
- Gross fixed capital formation
Gross fixed capital formation consists of resident producers' acquisitions, less disposals, of fixed assets. Fixed assets are tangible or intangible assets produced as outputs from processes of production that are themselves used repeatedly, or continuously, in processes of production for more than one year. (ESA 1995 3.102.)
- Intermediate consumption
Intermediate consumption consists of the value of the goods and services consumed as inputs by a process of production, excluding fixed assets whose consumption is recorded as consumption of fixed capital. The goods and services may be either transformed or used up by the production process. (ESA 1995 3.69.)
Products used for intermediate consumption should be recorded and valued at the time they enter the process of production. They are to be valued at the purchasers’ prices for similar goods or services at that time. (ESA 1995 3.72.)
- Net lending/net borrowing
Net lending/net borrowing is a balancing item in the capital account and the financial account.
Net lending/borrowing corresponds to the amount available to a unit or sector for financing, directly or indirectly, other units or sectors, or the amount which a unit or sector is obliged to borrow from other units or sectors. (ESA 1995 8.47.)
- Output at basic prices
Output at basic prices consists of the products which have been produced in the accounting period. Three categories of output are distinguished: market output, output for own final use, and other non-market output. Output is to be recorded and valued when it is generated by the production process. (ESA 1995 3.14.-3.16.)
- Property expenditure
Property expenditure (D.4) are expenditure paid to the owner of a financial asset or a tangible non-produced asset in return for receiving funds or being provided the tangible non-produced asset.
Property expenditure is classified in the system of accounts in the following way:a) paid interests (D.41):
b) distributed income of corporations (as expenditure) (D.42)
(1) paid dividends (D.421)
(2) withdrawals from income of quasi-corporations (as expenditure) (D.422)
c) reinvested earnings on direct foreign investment (as expenditure) (D.43)
d) property income attributed to insurance policy holders (as expenditure) (D.44)
a) paid rents (D.45).
(EKT 1995 4.41)- Property income
Property income (D.4) is the income receivable by the owner of a financial asset or a tangible non-produced asset in return for providing funds to, or putting the tangible non-produced asset at the disposal of, another institutional unit.
Property incomes are classified in the following way in the account system:
a) interest (D.41);
b) distributed income of corporations (D.42):
(1) dividends (D.421);
(2) withdrawals from income of quasi-corporations (D.422).
c) reinvested earnings on direct foreign investment (D.43);
d) property income attributed to insurance policy holders (D.44);
e) rents (D.45).
(ESA 1995 4.41)- Saving
Saving is the balancing item in the use of income accounts. It is the positive or negative amount resulting from current transactions which establishes the link with accumulation. If saving is positive, non-spent income is used for the acquisition of assets or for paying off liabilities. If saving is negative, certain assets are liquidated or certain liabilities increase. (ESA 8.42.-8.43.)
- Social benefits other than social transfers in kind
Social benefits other than social transfers in kind (D.62) include:
a) Social security benefits in cash are payable to households by social security funds and are provided under social security schemes. E.g. pensions, unemployment benefits.
b) Social assistance benefits in cash are payable to households by government units to meet the same needs as social insurance benefits but are not made under a social insurance scheme incorporating social contributions and social insurance benefits. E.g. living allowances paid by municipalities, child maintenance allowances.
- Social security contributions
Social security contributions (OECD Classification of Taxes heading 2000) covers all compulsory payments that confer an entitlement to receive a (contingent) future social benefit. These include a) employers' social security contributions, e.g. unemployment insurance and old-age insurance premia paid by employers, b) employees' social security contributions, e.g. unemployment insurance and old-age insurance premia paid by employees, employees' contributions to the National Pension Insurance scheme and to the National Health Insurance scheme, c) social security contributions paid by independent entrepreneurs and non-employed persons, e.g. old-age insurance premia paid by entrepreneurs.
The OECD Classification of Taxes heading "Social security contributions" covers only statutory social security contributions, and does not include voluntary social security (a sub-heading under D.611 "Actual social contributions" in the national accounts).
- Social transfers in kind
Social transfers in kind consist of individual goods and services provided as transfers in kind to individual households by government units and non-profit institutions serving households (NPISHs), whether purchased on the market or produced as non-market output by government units or NPISHs.
- State income tax
Current taxes on income, wealth, etc. (D.5) cover all compulsory, unrequited payments, in cash or in kind, levied periodically by general government and by the rest of the world on the income and wealth of institutional units. (ESA 1995 4.77.)
In the national accounts, taxes are recorded on an accrual basis. The accrual-basis method of recording differs from the cash-basis method of recording in certain respects. Tax amounts recorded on cash basis express the amount accrued on the cash account. Tax amounts recorded on an accrual basis show the amount of tax accruing from the transaction over the period of time when the tax liability was incurred. E.g. income tax, corporate income tax, wealth tax.
- Subsidies
Subsidies (D.3) are current unrequited payments which general government or the institutions of the European Union make to resident producers, with the objective of influencing their levels of production, their prices or the remuneration of the factors of production. Other non-market producers can receive other subsidies on production only if those payments depend on general regulations applicable to market and non-market producers as well.
Subsidies granted by the Institutions of the European Union cover only current transfers made directly by them to resident producer units.
Subsidies are classified into:
a) subsidies on products (D.31)
(1) import subsidies (D.311)
(2) other subsidies on products (D.319)
b) other subsidies on production (D.39).(ESA 1995 4.30.-4.32.)
- Taxes on production and imports
Taxes on production and imports (D.2) consist of compulsory, unrequited payments, in cash or in kind which are levied by general government, or by the Institutions of the European Union, in respect of the production and importation of goods and services, the employment of labour, the ownership or use of land, buildings or other assets used in production. These taxes are payable whether or not profits are made.
Taxes on production and imports are divided into:
a) taxes on products (D.21)
(1) value added type taxes (VAT) (D.211)
(2) taxes and duties on imports excluding VAT (D.212)
– import duties (D.2121)
– taxes on imports excluding VAT and import duties (D.2122)
(3) taxes on products, except VAT and import taxes (D.214)
b) other taxes on production (D.29).
(ESA 1995 4.14. - 4.15.)- Trend
Trend describes the long-term development in a time series. A trend series has been adjusted for seasonal and random variations, so that the effects of e.g. weather conditions or short-term labour disputes do not show in it. By contrast, permanent changes, such as growth in demand due to changed taxation, will show in a trend. The direction indicated by the end of a trend should be interpreted with caution. The latter part of a trend indicator may change once it has been updated with data for subsequent months.
- Value-added tax
Value-added tax (D.211) is a tax on goods or services collected in stages by enterprises and which is ultimately charged in full to the final purchasers. Value-added tax (VAT) comprises the value added tax which is collected by the General government and which is applied to national and imported products.
For the total economy account, VAT is equal to the difference between total invoiced VAT and total deductible VAT.
In the national accounts, taxes are recorded on an accrual basis. The accrual-basis method of recording differs from the cash-basis method of recording in certain respects. Tax amounts recorded on cash basis express the amount accrued on the cash account. Tax amounts recorded on an accrual basis show the amount of tax accruing from the transaction over the period of time when the tax liability was incurred.
Official Statistics of Finland (OSF):
General government revenue and expenditure by quarter [e-publication].
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