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Although many are in favor, there is not a large political majority in favor of phasing out duty-free sales at airports.
BJØRVIKA (Nettavisen Økonomi): shows a survey that Nettavisen has carried out among the parties to the Storting. Funding for the short-distance network in Norway is a major reason why the Conservatives and the Progress Party will stick with the scheme. These two parties are the clearest supporters of the plan.
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– It’s a very bad idea. Duty-free selling finances most of Avinor’s activities, including connection to the short-range grid, FRP leader Siv Jensen tells Nettavisen Økonomi. It is KrF who has now taken the initiative to reduce duty-free sales.
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– The time has come to abolish the duty-free regime, the head of the KrF program committee, Erik Lunde, recently told the Vårt Land newspaper. The party receives the full support of the social economist Harald Magnus Andreassen at SpareBank 1 Markets, who will also completely abolish the alcohol quota when we shop abroad. Jensen rejects this outright.
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Put bag
– It is the taxpayers who have to pay this. If you are going to do this now, you must first inflate many billions and then do other things to strengthen the framework conditions for airlines. It’s a very bad idea, repeats the former Minister of Finance.
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– Critics affirm that it is about subsidizing a few and those who travel hostile to the environment?
– It is now the case that revenue from tax-free sales helps finance a significant portion of our domestic air traffic. The short-distance network, Widerøe, to name a few examples, are routes that we would risk losing if we did not have this type of financing.
– I don’t know where KrF intends to find these billions, but KrF is not alone. Many parties are in favor, there are multiple parties involved in this discussion, says Jensen.
Unacceptable
– But do you think there is a political majority in the Storting to settle tax-free sales?
– I can’t imagine it, at least it would be very stupid to do so. There will be no majority for this as long as the Progress Party can influence politics. This has come up in various contexts, and it is completely irrelevant that we are part of something like that.
It is the Labor Party that holds the key to the issue. Communications consultancy Anne Odden says they will consider allowing Vinmonopolet to take over the operation of the tax-free scheme when the current agreement expires. Admissions to airports continue. This is in line with the position of the Center Party.
– This means that the offer still exists, but that it is managed by a responsible actor with social responsibility. This means that the profits go to the community rather than to a private German company, says parliamentary representative Kjersti Toppe in the Nettavisen Center Party.
– How will the lost income be replaced to finance, among other things, the short-haul network?
– We still want Vinmonopolet to pay the rent to Avinor, which will guarantee the income. In any case, it is not the tax-free income that operates the small airports, Avinor has the big expenses in the larger airports. Investing in small airports is not about being tax free, it is about political will.
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Not credible
– Is the Center Party going to completely abolish the alcohol quota, for example, when you have been in Sweden and have bought?
– No, but we are in favor of reducing the increase in the tax-free quota, answers Toppe, who makes the following statement to KrF.
– They are not credible in this case. KrF itself helped create a majority for the increase in the tax-free quota for wine from two to four bottles, which took place in 2014. This is a relatively large increase, they could start by organizing what they themselves have been responsible for increasing duty-free trade. of alcohol.
REJECT CRITICISM: Erik Lunde in KrF rejects criticism from the Center Party that they voted to increase the tax-free quota in 2014.
Photo: Terje Pedersen (NTB Scanpix)
Faced with this criticism, Erik Lunde responds:
– I think this criticism of the Center Party is a bit desperate. I think that in Norway it is very difficult to doubt that KrF represents an alcohol policy that contributes to the least possible harm related to alcohol. The government platform has gained support to continue with an alcohol policy that contributes to reducing consumption and improving public health.
No advance
– Tax free, we have had no impact on our main policy. So it is in all collaborations. You win something and you lose something. Sp also has a lot of experience after eight years in the red-green government.
Lunde says KrF’s tax exemption proposal is now about what kind of policy the party will follow for the next four years. KrF wants to scrap the duty-free scheme, because it leads to more air traffic, it is a tax relief that affects the antisocial and contributes to worse public health.
– I prefer to challenge the Center Party to think if they really believe that cheap alcohol and tobacco will finance the district’s politics in the future. We can afford to ensure a good offer of flights throughout the country without being tax-free, says the KrF politician.
But a majority in the Liberal Party program committee will abolish the duty-free scheme. Sonder Hansmark of the Liberal Party notes that duty-free selling gives the state a tax loss of NOK 3.7 billion every year.
Sponsorship
– I think we can use that money in a more sensible way than sponsoring cheap alcohol for Norwegians traveling abroad. For example, we can use some of the money to invest in electric airplanes on the short-haul network, so that people can travel efficiently and in an environmentally friendly way, says Hansmark.
The Liberal Party, on the other hand, does not want to abolish the quota.
– When you buy alcohol abroad, you pay taxes, but you do not do it at Norwegian airports. I think it is better to reduce Norwegian alcohol taxes a bit to curb cross-border trade in Sweden, says the liberal politician.
Tax policy spokeswoman Kari Elisabeth Kaski at SV says they support KrF’s proposal. SV has been against the tax-free scheme for many years.
SUPPORTS KRF: Kari Elisabeth Kaski (SV) supports KrF’s proposal, but it is not enough to pass.
Photo: Håkon Mosvold Larsen (NTB scanpix)
Re-prioritization
– But how to compensate for the loss of income?
– It will be with a combination of instruments. We will continue to have rental income from these areas, differentiated airport rates in Avinor, which favors the short-haul network and the new prioritization of the state budget, responds Kaski.
SV, on the other hand, will not completely abolish the alcohol quota.
MDG has stated in its program that we will phase out duty-free sales at airports. The Green Party believes that the duty-free scheme works as a “meaningless extra bonus for those who choose flights.” In addition, the plan contributes to increasing alcohol consumption.
– It is bad environmental policy and bad public health policy to finance the necessary infrastructure with the sale of alcohol, writes communications consultant Ida de Rosa at ODM in an email to Nettavisen.
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Increased airfares
The reduction in duty-free sales will increase tax revenue, because alcohol sales in Norway will increase, which MDG believes can be used, for example, to keep the network short haul.
– In addition, MDG believes that ticket prices should increase on routes where there are alternatives to flights, especially between the largest cities in southern Norway, writes de Rosa.
Rødt’s policy is for Vinmonopolet to take over alcohol sales at airports, in order to limit the profits of private actors in favor of greater consideration for public health. The party believes that it is a public responsibility to ensure the short-haul network, which for many is the necessary public transport.
The short-range network could be affected if Vinmonopolet takes over, because Rødt believes it can become a balancing element in the state budget. He believes that the party can be compensated, for example, by cutting profits for the richest in the country, taking more into account public health and, to a greater extent, ensuring air travel where there are no good alternatives.
Constitutes 10 percent
About 10 percent of all alcohol Norwegians consume is purchased at a tax-free discount, according to figures from the National Institute of Public Health. Tax-free sales have naturally plummeted during the crown pandemic due to strict foreign travel restrictions.
Avinor’s semi-annual figures show that tax-free store rental income fell from NOK 720.6 million in the second quarter of 2019 to NOK 38.7 million in the corresponding quarter of this year. In the first half of the year, the drop in revenue is from NOK 1.255 million to NOK 469 million. For all of 2019, Avinor withdrew 278 billion from tax-free stores in rental income.
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