In Finland, public goods and services are provided by two tiers of government where municipalities constitute the local level.
Municipalities are of considerable importance to the whole economy as they employ around 20% of the total workforce. The bulk of
municipalities' expenditures come from producing social and health care services and primary education. In most of these services,
the geographic location of services is relevant for the citizens. The most important revenue source is the flat municipal income tax
which the municipalities can set freely. A central government grant system, consisting of 20% of total revenue, is used to equalize
local cost and revenue disparities.