Norway salmon farmers facing new tax hit

Seafood Norway CEO Geir Ove Ystmark

NORWAY’S fish farmers are facing the prospect of a new production tax from next year.

The government has announced proposals for a tax of NOK O.40 (40 øre or cents) per kilogramme on salmon, trout and rainbow trout which is expected to produce revenues of NOK 500 million for local and regional municipalities, mostly in fish farming areas.

The new tax will replace contributions from the current Aquaculture Fund and shoves into touch controversial proposals for a 40 per cent flat rate tax proposed by a special committee last November. The industry said this tax, if implemented, would drive investment out of Norway to rival countries such as Scotland, Iceland and Canada. It also sharply divided political opinion in the country.

Full industry reaction on this new proposal is awaited, but the early response seems to be mildly favourable. Geir Ove Ystmark , CEO of the employers organisation Seafood Norway called it a politically wise decision. However, the 40 øre a kilo is thought to be ten cents higher than what had been hoped for, particularly now that the aquaculture sector is being ravaged by the fallout from Covid-19.

This latest proposal will be announced in a new finance bill and is expected to operate from the start on January 1st 2021.

Finance Minister Jan Tore Sanner said:

\’The aquaculture industry is a large and important industry for Norway, which contributes to significant value creation and employment along the coast, and the government will facilitate good and predictable framework conditions. At the same time, Norway is one of the few places in the world where climate and natural conditions facilitate efficient farming of salmon in the sea. Therefore, it is natural that part of the return accrues to the community through a production tax.

\’We want to ensure that the municipalities that contribute to facilitating aquaculture receive a share of the aquaculture income. Now they will receive a more stable and predictable production fee, as well as a share of future auction revenues.\’

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