Think about salmon tax terribly carefully, Norwegian MPs told

Norwegian politicians have been warned that a predicted boost to the public purse from a new tax on salmonid farmers is likely to be wiped out by knock-on effects of the tax.

Kjell Bjordal, chairman of one of the country’s top 10 salmon farmers, Nordlaks, delivered the warning during a consultation hearing attended by some members of the Storting, Norway’s parliament, yesterday.

MPs were discussing and hearing industry views on the “ground rent tax” – also known as the salmon tax - which will be retrospectively imposed on salmonid farmers from the start of this year.

Bjordal was speaking as the representative of seafood sector organisation Sjømat Norge (Seafood Norway). He pointed out that news of the tax had already limited the amount farmers spent on extra biomass capacity auctioned by the state last year and would do so again at the next auction.

Permit auctions

“During this government period, the state has calculated a (salmon tax) revenue of NOK 3.8 billion times two, which is approximately NOK 8 billion. Already in 2022, public revenue of four billion was lost in the concession (auction) round,” Bjordal told the committee.

“There is a new round of concessions in 2024 and there is no reason why you should not lose another four or five billion in that round as well. Then you are already over the proceeds (of the tax).”

Bjordal said the government is wrong when it says that a ground rent tax on aquaculture does not affect the level of investment in the sector.

“It’s nonsense. It couldn’t be more wrong. Immediately after the proposal was made, investments worth NOK 30-40 billion for the aquaculture industry were put on hold or cancelled.”

Find a better model

He added that 80% of the income for fish farming municipalities and the state is activity-based income.

“It will have dramatic consequences in District (coastal) Norway. We will quickly reach NOK 30 billion in the minus and eight billion in the plus, and then the sum will be minus,” he said.

Bjordal said the salmon industry was willing to pay more money to the state but not by the method the government is demanding.

“Think very carefully about what you are doing now. It is no problem to bring in 3.8 billion a year. The industry is willing to do so, but find a model that does not damage public revenues as brutally as this model does and find a model where we can continue to build the district,” he concluded.

Hoping for consensus

The meeting was chaired by Geir Pollestad, deputy parliamentary leader of the Centre Party, which governs in coalition with the Labour Party.

Before the hearing he told Fish Farming Expert’s Norwegian sister site, Kyst.no, that he still believes in broad parliamentary agreement can be reached on the tax, despite former prime minister Erna Solberg and her Conservative Party stating that they won’t give their approval.

The government has proposed a salmon tax rate of 35%, levied on top of corporation and production taxes, although the Socialist Left Party wants a salmon tax rate of 48%.

The Centre and Labour parties have 76 MPs between them, while the Conservatives and potential allies have 68, so it’s unlikely the government will need to rely on the Socialist Left’s 13 MPs to push the tax through in June.