Investments worth £2bn remain on hold, says Norwegian salmon sector

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Planned investment programmes in the aquaculture industry worth NOK 30.8 billion (£2.2 bn) have still not been started since the introduction of the salmon tax.

That is the conclusion of a survey carried out by NHHS Consulting on behalf of the employer organisation Seafood Norway (Sjømat Norge).

Seafood Norway says the report shows that the situation is pretty much unchanged one year after the salmon tax (also known as the “ground rent” tax) was introduced, and that frustration around the tax is still just as great.

Both the tax model and the process of implementing it have created considerable uncertainty and unpredictability, according to Peder Weidemann Egseth, Head of Tax and Business Policy at Seafood Norway.

Many of the investments that have been put on hold are projects that would strengthen the social contract, create new activity and more profitable jobs along the coast, says Seafood Norway.

Egseth said: “Many of the investments that have been put on hold are projects that would strengthen the social contract, create new activity and more profitable jobs along the coast.”

The tax is backdated to January 2023 although companies will not have to start paying until this year.

NHHS Consulting says planned investments worth NOK 40 billion (just under £3bn) were immediately reduced, cancelled or postponed when the plan was first announced. Only a quarter of those projects, by value, appear to have been resurrected since then.

Several workers received layoff notices, and the contract market for salmon collapsed in the wake of the government’s proposed standard price as showed by the NASDAQ price index.

“Our investigations indicate that the tax and the associated process have led to an increase in the risk of investing in Norway for companies,” said Axel Fagerbakke, project manager at NHHS Consulting.

Fagerbakke also pointed out that access to capital for a majority has been negatively affected.

“The banks make demands for increased security and equity, and in combination with the owners’ tax burden and uncertainty, this has in sum led to less available capital,” said Fagerbakke.

The fact that around a quarter of the investments that were initially put on hold have been taken up again is explained by the need for a number of necessary operational updates, NHHS adds.

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