The government turns around and gives Bø a special exemption from the rules – NRK

– This is tragic. The government is using Bø and some of these millionaires to fight the wealth tax, says Aps Vice President Bjørnar Skjæran.

– This is simply camaraderie between conservative politicians. The Bø municipality itself has taken this risk and now the Conservative government rescues them. It’s pretty serious when we see how many other municipalities are struggling to make ends meet financially, says SV’s fiscal policy spokesperson Kari Elisabeth Kaski.

They both react to the news that the government is now coming to Bø’s rescue and has enacted a special rule that will only apply to the new tax haven in northern Norway.

Something that is also mentioned in Bladet Vesterålen and Dagens Næringsliv.

Will attract rich people

Vesterål Municipality has slowly become known nationally for cutting wealth tax to attract people rich in capital. The hope is that they will inform about the relocation and invest in the local community.

In the list of those who have signed up, we find several well-known names. Like Bjørn Dæhlie and real estate investor Einar Andreas Sissener.

Even if some change their minds, new names keep popping up on the list. According to the mayor, the number of “rich” now stands at 15-20.

But one problem the municipality was not prepared for was how expensive the gimmick could be. As a result of the so-called tax equalization scheme.

For Bø to provide tax relief means less money in the common coffers. Bø was likely to have to cover this himself.

In short, the calculation showed that Bø was likely to lose 10 million, and those who have reported that they have moved so far, showed a calculation made by KS.

In fact, the government changed the regulations to prevent the reduction of the municipality’s tax revenue from being offset by other municipalities.

But now the ministry is coming to the rescue of the Nordland municipality. They give Bø a special exemption from the rules.

– We believe that it is positive that municipalities think creatively and generate more activity. But we see that in this particular area, the consequences were not clear enough in the system. We are assuming the consequences of that, says Secretary of State Paal Pedersen (H) to NRK.

Lacks practice

The point is that Bø will lose around 5 million in tax revenue from those already living in the municipality, when they reduce the local part of the wealth tax from 0.7 to 0.2 percent.

This is a loss that Bø must bear alone. But they won’t have to lose anything else.

With the new government exception, the municipality receives help to cover community tax losses that occur when the wealthy move out to the municipality to save tax dollars.

Secretary of State Pedersen says that Bø is the first municipality in several decades to make such a change, and therefore the regulations were not clear enough for the Bø municipality to see the full consequences of the decision.

– The guidelines have not been clear enough here. In recent decades, all municipalities have had top tax rates on both income and wealth, says Pedersen.

– We consider it demanding for Bø to see through all the effects that the reduction in wealth tax has. Therefore, they do not have to cover that loss themselves.

Pedersen explains that the loss that Bø will inflict on the revenue system, which would mean that other municipalities would in practice receive less, was originally something the municipality had to answer for itself and could lead to the tax stunt ending in a strong negative. .

– It is this technical part that has been too vague. We are clear that they should cover the loss for what they themselves could predict, but where the system has not been clear enough, we believe that they should not have to cover the loss.

-It is not an easy calculation, because there are many Xs here, emphasizes the Secretary of State.

Believes that other municipalities should accept the bill

The Labor Party and the Socialist People’s Party have very little sense of this.

– What happens in practice is that ordinary people all over the country have to accept the Bø municipality’s tax bill. Then this begins to acquire dimensions that have no meaning, says Skjæran.

The leading deputy of the Labor Party points to the municipality of Lavangen, which according to him has gotten into a situation for which they themselves can do nothing.

– Here nothing could be done with the regulations to help the municipality with something that occurred to them without justification. In Bø, the government has done this trick knowingly and willingly and then you go in and change the regulations so that other municipalities and taxpayers pass the whole country must cover the risk costs. It seems completely useless, you ask me.

Kari Elisabeth Kaski believes that the government here is on the side of established practices and regulations.

– Bø knew they would lose tax revenue and state revenue, it’s silly that this is difficult. Now, this is at the expense of other municipalities in the country, says Kaski.

Pedersen believes that the accusations by the Labor Party and the Socialist People’s Party are just empty rhetoric.

– The government has appointed a professional committee precisely because we want to do it in a predictable, professional and thoughtful way. I would also like to remind both Kaski and Skjæran that there was a large majority in the Bø municipal council who voted in favor of the wealth tax decision, including the Labor Party.

The Secretary of State emphasizes that it is an important principle that other municipalities will not be responsible for self-imposed loss inflicted on individual municipalities.

– We are now working on how to solve this in practice. We have now found a compromise where Bø must bear his share of the loss and then we answer for the rest.

Must look at the schematic

In May, a committee was established to conduct a proper review of the municipal revenue system.

They must make a principled assessment of the consequences of having a tax rate lower than the maximum rate, says the Secretary of State. The committee will present its report in June 2022. Then a new assessment will be made for Bø for the 2023 budget.

– So Bø is currently treated as an exception, as they were the first out.

No other municipality will obtain the same exception, the Secretary of State is clear.

– Does this mean that the rest of the municipalities in the country deliver the invoice for the invention to Bø?

– We will return to the practical consequences. It remains to be seen how the calculation will be.

– But is Bø rewarded for being the first out?

– The consequences of coming out first is that we see that the regulations have not been clear enough. Now we are going to have this investigated, so that we do not get into a similar situation again.

Satisfied mayor

In January, the then Minister of Local Government and Modernization, Monica Mæland, was clear that municipalities had to bear losses and take risks themselves.

Today Bø Mayor Sture Pedersen is happy with the new message.

– This gives us peace of mind and we must show that we will take advantage of this opportunity we have to create new jobs.

The five million they have to cover, look forward to:

– I have said from day one that it was a risk we had to take. If the population increases now, as we hope, this will be covered.

Paal Pedersen is impressed with the innovation:

– In general, we are positive that municipalities are creative and think of new solutions on how they can generate growth and innovation at the local level, concludes the Secretary of State.