1. The compilation of turnover and wage and salary indices
Ms. Suvi Kiema, Statistics Finland

2. The use of VAT for STS - The challenges
1) Data sources
timeliness of VAT data
dependence of administrative data sources
responce burden can’t be increased
pressure to produce indices faster
2) Estimation of change
actual vs. apparent changes: how are startups and closures, changes in activity class or mergers and split-offs treated?
3) Heavy editing process
Mini-workshop 2

3. Main data sources for STS
The main administrative data sources for STS are monthly VAT (T+75) and PAYE (T+45) data.
Monthly turnover data from businesses with >8500 euro yearly turnover and wages from all regular employers
Transmitted from the Tax Administration each month
Supplemented by a direct sales inquiry from 2,000 enterprises
largest enterprises in each branch of industry
Background information for the enterprises is acquired from Business Register
Branch (NACE code), institutional sector
Mini-workshop 3

4. Changes in monthy tax return data in 2010
Companies with yearly turnover less than euros will no longer be in monthly data.
If the yearly turnover is less than euros, but more than euros, companies will report quarterly.
the quality effect of the tax reform is rather small: even though VAT data covers monthly information of only 48,8% enterprises after the tax reform in year 2010, the share of the total turnover of enterprises reporting monthly basis is still high, 99,4%
Mini-workshop 4

5. Simple index calculation
Finland has relatively few big enterprises, so direct data collection can be kept small. It covers only 2000 largest enterprises (<1% of the total population) but over 50% of the turnover.
Index calculation is simple:
Comprehensive data from the previous year makes it possible to estimate the level using only a change estimate
Mini-workshop 5

6. Editing is everything
When using a comprehensive administrative data, it is important to consider how change will be measured ->
actual vs. apparent changes
Treatment of start-ups, closures and changes in activity class
Mergers and split-offs
jan feb mar apr may jun
Turnover
Mini-workshop 6

7. Effect of productivity
The compilation of statistics directly related to the VAT data requires almost 20 man years per year, including chargeable activities
This is because the editing is focused on micro level
Approximately 60% of the time used for STS turnover and wage sum is used for editing.
30% goes for direct data collection,
10% on data analysis and development
Mini-workshop 7

8. The production process
Raw
Data
(VAT, BR)
Index
calculation
Unit
data
Adjustment of
observations
Indices
Publication
Sybase database
- SAS -batch programs (calculation)
- Power Buider Application
(determination of classifier parameters)
- Power Buider Application (adjustments)
- SAS -batch programs (re-calculation)
Pre-
processed
Mini-workshop

9. Effectiveness of micro-level editing
Currently it seems that micro-level editing has surprisingly little impact on the final figures
When comparing pre-calculated indices to the final (published) indices in one-digit level it was found that editing mostly only affects the latest month
over 80% of the revisions were explained by the manual editing made in the single most significant enterprise of the all edited enterprises
micro-level editing is inefficient
Mini-workshop 9

10. Plans for the future
The project's main goal for the future is to significantly reduce the number of firms selected to the editing list (checked manually)
Working name for the new method is: cutting and filtering the sausage
1) Investigate the minimum number of enterprises that has to be checked manually in any case.
2) Develop automated processes for selecting enterprises with abnormal observations that may have to be checked manually.
Mini-workshop 10

11. Mini-workshop