March will finally be the month when the Norwegian ground rent tax – also known as salmon tax – comes to the Storting for approval. This will make it possible for the proposal to be processed before the Norwegian parliament takes a break for the summer. The Ministry of Finance is now in the midst of drafting legislation on the tax, after receiving more than 420 responses in the consultation round that closed days after it came into force last January 1.
Minister Vedum does not talk about the changes
Finance Minister Trygve Slagsvold Vedum has told the Norwegian news agency NTB that the changes were announced in connection with the national budget and that after a good and broad consultation round, they will present the proposals to the Storting this spring as announced. It was he who presented the initial proposal for the salmon tax last autumn, revolutionizing the Norwegian aquaculture industry. Since then, criticism, especially of the proposed method to calculate the price of fish from the cages, has been continuous.
Continued pressure since then has led Minister Vedum to qualify his initial proposal on several occasions. Already in November, he said that, instead of the standard price set by the Nasdaq exchange of the initial proposal, real income must be the basis. However, his idea of creating a council to set the price on the model of the standard price council for the oil tax did not convince the industry. Then, Sjømat Norge reminded the minister that selling salmon is significantly different from selling oil.
Last week, Geir Pollestad, member of the Storting’s Finance Committee and head of finance for the SP (Norwegian Center Party), the same as the Minister of Finance, admitted that there will be changes and open-mind. “What must be resoundingly clear is that it is the right price that should apply”, he said. Nevertheless, in his statements to NTB, Vedum did not comment further on what changes may come or how much the proposal differs from what the government originally presented.
The tax rate remains undetermined
In recent days there has also been discussion about where to place the minimum deduction, and between 4,000 and 5,000 tons has been proposed to protect smaller breeders. But, above all, the debate has continued around the percentage of the tax. The government says that the state revenue should be NOK 3.65-38 billion and, according to experts, this would be a lower rate than the estimated 40%, something the industry has been suggesting for some time. This was done for example by Nova Sea in its consultation response to the proposed tax on ground rent in aquaculture.
“Several different circles have calculated the total proceeds from the present proposal, and land on a proceeds far in excess of the government’s estimate of NOK 3.65 or 3.8 billion”, they said then. The report they referred to – ‘Salmon tax challenge’ (Jr and NC Consulting, 2022) – estimated total revenue at NOK 10 billion, which, according to Nova Sea, would mean that the tax rate itself should be reduced considerably. For them, setting the tax at 40%, without any staggering or alternative levels, is arbitrary and they recalled that several industry players have calculated that a basic income tax of 15% would already provide the desired revenue.
Meanwhile, in his statements to NTB, the Norwegian Finance Minister has continued to defend the discourse he has maintained since the beginning. The Norwegian aquaculture industry is successful, creates great value, and has had very high profits. Therefore, the government believes that those who earn high profits by using the community’s natural resources can contribute more economically to the local communities and the community through land rent.