“Everything is still far from rosy in the salmon universe, at least in the Norwegian part of it,” said Mowi CEO Ivan Vindheim, speaking during the presentation of Mowi’s fourth-quarter and year end results on 15 February.
Despite a year of record-busting earnings, the proposed tax has caused significant unease for the Norwegian salmon farming giant, as well as the aquaculture industry as a whole in Norway.
The resource rent tax on aquaculture, nick-named the “salmon tax”, came into force on 1 January, and will be submitted for approval in the Norwegian parliament in March. Legislation is still being drafted by the Ministry of Finance, but meanwhile the debate over the tax rate and its implementation rages on.
Larger salmon farming businesses may be hit hardest by the new legislation, with employer organisation Seafood Norway claiming some companies will be forced to pay over 100% in tax. Uncertainty over the new tax burden has led to staff layoffs as well as some industry projects being scrapped or undergoing reorganization into new subsidiaries.
Vindheim took the opportunity of Mowi’s fourth quarter announcement to add his own criticism to the debate. “Such a tax level is completely unprecedented in the global aquaculture industry and will place major limitations on future growth.” Vindheim noted that as many as eight out of ten are against the tax proposal.
“The Norwegian government’s proposal for an effective tax level of 62% for the Norwegian salmon-farming industry, or approximately 80% with Norwegian wealth tax, will completely undermine future growth prospects for coastal Norway’s most critical industry,” said Vindheim.
As Norway’s largest salmon producer, Mowi is among the country’s leading employers, with one in three hundred working for the aquaculture giant. Vindheim said he feared that Mowi’s ambitions for continued growth in Norway will be severely inhibited by the government’s proposal.
“This industry currently employs 60,000 people in coastal communities, and at the end of the day it is their livelihoods as well as future job creation that are being put in peril.”
“I sincerely hope that government and parliament will listen to the industry and wider coastal communities and choose a different tax rate and a tax model that is less devastating to the Norwegian aquaculture industry so that we can continue to invest in coastal Norway in the future,” Vindheim said.