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This week, Ivan Vindheim, CEO of Mowi, was interviewed by Reporter Eleni Giokos on the US news network CNN and showed his dissatisfaction with the “salmon tax” imposed by the Norwegian government’s plans. The goal according to the Norwegian Minister of Fisheries and Ocean Policy, Bjørnar Selnes Skjæran, was to improve social benefits in coastal communities where farms are accommodated. The government wants to develop sustainable management of the aquaculture industry, taking into account de locally-produced feed, reduce the carbon footprint and ensure henceforth the circular economy. The problem is that financially, the issue turns complicated.
The first proposal of the Norwegian government was to tax 40% on salmon and trout companies (the known “salmon tax”), being applied to production volumes above 5,000 tonnes per year, although currently the tax now in effect and will be applied to production volumes above 4,000 metric tonnes. Nevertheless, the final decision is being postponed and is expected to be implemented by the end of summer.
“This tax level is unprecedented, and if it’s put in action, it would impose major limitations to future investments and the development of this fantastic industry”, said Vindheim “It would be devastating.”
Giokos asked Vindheim, for the level of taxes that his company would pay according to their profit and he said “We already pay between 40 and 50 percent in taxes. It’s not that we are not paying taxes. There’s no private industry in Norway that pays the kind of taxes that we do,” and added “but we also need some money left to continue to invest with.”
The postponed or cancelled investments in Norway
According to the Norwegian Seafood Federation, the capital investments of approximately NOK 35 billion have been postponed or canceled in 2022 last quarter and January 2023 and it could lead to a reduction in Norwegian salmon output in the future as well as an increase in price.
The estimates go towards a reduction in the taxes to 15-20% and there are consultations between industry and government to determine the methodology used for tax calculation. Farmers preferred determining the tax based on current received prices per salmon (quality and size of each fish) instead of a flat tax based on the Nasdaq price, which those farmers without the technology and capacity for producing high-quality salmon could not afford. Now all parties are at a waiting point for final decisions.
Finally, Vindheim said at the end of a CNN interview that he believes the politicians change the tax “I am positive in the long term. We just need some time to convince the politicians.
Mowi is a global leader in the seafood industry and the top producer of farmed salmon worldwide. It has farming operations in Norway, Scotland, Ireland, the Faroe Islands, Canada, Chile, and Iceland.
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