“Real income must be the basis”, Norwegian Ministry of Finance on salmon tax

Trygve Slagsvold Vedum, Finance Minister of Norway. Photo: Norway Ministry of Finance.
Trygve Slagsvold Vedum, Finance Minister of Norway. Photo: Norway Ministry of Finance.

"The principle that it is the real income that should be the basis for the ground rent tax is established", says the press release issued by the Norwegian Ministry of Finance regarding today's meeting to discuss the ground rent tax on salmon farms' income. The session has brought together the different parties involved, including Seafood Norway representing salmon farmers; seafood companies; the Norwegian Minister of Fisheries and Oceans, Bjornar Skjaeran; and the Norwegian Minister of Finance, Trygve Slagsvold Vedum.

Tax must apply to the profits

"It has always been clear that the price must be real and reflect an independent market price. In order for the ground rent tax to work as intended, it must apply to the profits in the industry", said Finance Minister, Trygve Slagsvold Vedum. "A standard price must take into account quality differences and sizes of the fish. It has never been the government's intention that all salmon should be valued at one price, as certain players have tried to portray in the debate recently", he continued.

Criticism from the industry had come because in the consultation note on the ground rent tax on salmon farms, the government spoke of a "market price" based on prices registered on Nasdaq, a price that, according to the sector, does not reflect the reality of prices.

New alternative included

In today's release the Ministry says that in the Aquaculture Tax Committee's report, it discusses various methods for finding an independent market price. "Standard prices based on prices from Nasdaq, as proposed in the consultation note, are in line with the Aquaculture Tax Committee's proposal for the design of a ground rent tax", they claimed. And went on to add: "The committee also mentions a standard price council as a possible alternative".

"The aim is to find the market price for the salmon, and there are several possible ways to do that", Vedum insisted. "We have good experience with a standard price council for the petroleum tax. It is among the options we are looking at, and an option that I wanted to discuss with the industry players in today's meeting", he said.

There will be ground rent tax

However, in the release, the government wanted to make it clear that the negotiations do not imply a withdrawal of the proposal. "There will be ground rent tax", claimed Fisheries and Oceans Minister Bjørnar Skjæran. "In the proposal presented to the Storting, we will ensure taxation that builds on the goals in the Hurdal platform of more jobs, greater value creation, and increased export income from the aquaculture industry", he said. "For the government, it has been important that the host municipalities come out better than today, and that the bottom deduction is of such a size that it is mainly the largest players who pay ground rent tax", he added.

The shadow of the real consequences that the proposed tax is already having on the processing facilities of some companies, such as Lerøy Seafood or SalMar, was also present in the note with a brief note from Minister Vedum. "I would like to emphasize again that there will be no ground rent tax on processing", he concluded.

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