Salmon’s big guns unite to condemn new tax plan
Norway’s biggest salmon farmers have come out almost unanimously to condemn the Oslo government’s revised “salmon tax” plans.
Despite the basic rate of the proposed “ground rent” tax being reduced from 40% to 35% and companies being given a NOK 70 million allowance (around £5.5m) before the tax kicks in, the producers have declared the final plan will seriously damage the industry by hitting future investment, eventually damaging the country as a whole.
The tax would be levied, on top of existing corporation tax, on sales of salmon. The taxable amount would be calculated with reference to a spot market price, rather than the price actually achieved by the producer.
Some in the industry are now pinning their somewhat slim hopes on the possibility that the proposals will fail to get through the Norwegian parliament, because of differences between the parties.
Mowi chairman Ole-Eirik Lerøy told Seafood Norway’s annual conference in Bergen that the government had missed the market completely, arguing that salmon farming was not comparable to other industries subject to a ground rent tax.
The industry was vertically integrated, he said, with 80% of earnings made in the sea while 80% of investment was carried out on land.
He added: “We do not harvest from a ready-made warehouse in the wild – our product must be further refined,” and said that when salmon companies leave a particular coastal area, it soon returns to its original condition.
Mowi also said in a Stock Exchange message that the new plan was not much different from the old one with the company’s CEO Ivan Vindheim telling the website e24.no that while the new version was disappointing, it was not entirely unexpected. He said it was clear the earlier consultation was “not genuine”.
SalMar said there was still time for Parliament (the Storting) to amend the proposals before the summer.
It said in a Stock Exchange announcement: “SalMar submitted a detailed response to the public consultation process clearly and strongly opposing the proposed tax. The basis for the tax proposal assumes the salmon industry generates excessive returns compared to the risk involved, but this is not accurate.
“The entire tax proposal thus rests on failing premises. Therefore, the basic rent tax on aquaculture in Norway should be permanently set aside.”
Grieg Seafood said: “Parliament is expected to discuss the proposal and enact the law before July 2023. Thus, the Parliament may still make changes to the proposal which has just been published.
“When the law has been enacted by the Parliament, Grieg Seafood will assess how the tax will impact the group’s strategy and investments.”
Cermaq also said it was disappointed by the outcome, maintaining the government had not taken into account the impact on support and supplier industry jobs.