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The government’s proposal for a new special rate for salmon farming does not take into account the profitability of the industry. That’s unfortunate, says Professor Karen Helene Ulltveit-Moe.
The Sjømat Norge trade association is pleased that the government has abandoned the proposal for a basic interest tax and hopes Storting will do the same. The photo was taken at the SalMar facility in Frohavet on the Trøndelag coast.
Gorm Kallestad / NTB scanpix
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He chaired the government committee to consider a new aquaculture tax. Most of the committee proposed a basic interest tax based on the additional income companies have for using Norwegian fjords for their cages. But it has long been clear that such a tax would not win a majority in the Storting. The aquaculture industry has worked diligently to reduce that tax.
Instead, Finance Minister Jan Tore Sanner (H) presented on Tuesday a proposal for a production rate of NOK 0.40 per kilo of fish.
– I think that position has many unfortunate aspects. It’s not related to profitability, just sales revenue. It will hold firm whether it makes a profit or a deficit. I think it is an unfortunate design of a tax, Ulltveit-Moe tells NTB.
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However, she takes into account the precarious situation that the crown crisis has created and will not be too harsh in criticism that the proposal that she believes to be the best has now been shelved.
– Any proposal that is presented now must be seen in light of the economic crisis in which we find ourselves. There is no natural time to introduce a tax that is significantly increased.
Good distribution effect
It is estimated that the government’s salmon tax will generate NOK 500 million in income, which will go to the municipalities where fish farming takes place. The proposal that Ulltveit-Moe and the majority of the committee presented would give the state and municipalities up to NOK 7 billion in revenue a year. Such a basic interest tax would have been worth gold only in times of crisis, says Ulltveit-Moe, a professor of economics at the University of Oslo.
Undoubtedly. The land income tax has very positive consequences for distribution, she says.
The industry has had very good profitability for years. Success continued until 2020, thanks to the low crown exchange rate in the first quarter, Dagens Næringsliv wrote on March 19.
However, Ulltveit-Moe is convinced that only a proposal for a new tax will be submitted now, and hopes that it will pave the way for more extensive taxation later.
– I hope the introduction of some kind of excise tax is the start of something else, she says.
Finance Minister Jan Tore Sanner (H) believes that the proposal for a production tax on farmed fish provides predictability to the industry. He points out that many parties and the industry itself are against a basic interest tax.
Lise Åserud / NTB scanpix
– Impaired competitiveness
The commercial organization Sjømat Norge is very relieved that the basic interest tax is now parked.
– The majority proposal in the aquaculture committee would dramatically weaken the competitiveness of the Norwegian aquaculture industry and also stimulate further investment in other countries. The industry needs predictable and competitive framework conditions to secure Norwegian jobs and export earnings, which the government now plans to do, CEO Geir Ove Ystmark says on the organization’s website.
– We now expect Storting to also clearly conclude that the basic interest tax is in place, he adds.
Great endurance
Finance Minister Jan Tore Sanner (H) does not want the additional billions that a basic interest tax would provide, it would be useful in times of crisis
– What is useful is that the aquaculture industry facilitates growth and employment along the coast, he tells NTB.
He claims that the government removed the basic interest tax because there was strong opposition to it both in the industry and among the parties in the Storting.
– There are many parts that have indicated that they do not want it. That is why we have abandoned the proposal for a basic interest tax and are proposing a production tax, Sanner tells NTB.
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He believes that the proposal for a production tax will provide predictability for the aquaculture industry and for the municipalities that facilitate it. In recent years, host municipalities have received income from the sale of salmon licenses at auction, but these fluctuate from year to year.
However, the government has proposed that the state receive more of the auction proceeds, at the expense of the municipalities, in the face of vigorous protests by opposition parties SV and Sp.
– They give with one hand and take with the other. But it won’t happen at Storting, says SV fisheries policy spokesman Torgeir Knag Fylkesnes.
