A bill proposing a resource rent tax on Norwegian aquaculture has been presented by government to parliament (Stortinget) for approval. The government’s new proposal remains similar to its initial proposition made in September 2022, although the resource rent tax rate is reduced from 40% to 35%.
In a press release, the Norwegian government explained the intention of the proposal is to ensure that local communities along the coast and that society as a whole will receive a greater share of the value created by the fish farming industry.
“We have a long tradition in Norway in which value that is created from using our common natural resources shall benefit society as a whole. Access to our common natural resources has enabled this industry to generate particularly high earnings. All of us should be able to derive greater benefit from the significant value that is created. It is now the time to introduce a resource rent tax for the aquaculture industry,” Prime Minister Jonas Gahr Støre said.
According to the country’s Minister of Finance Trygve Slagsvold Vedum, the model, which sees society receive a share of the profits generated from the utilisation of its natural resources has served Norway well.
“The resource rent tax on petroleum has played an essential role in building up the Government Pension Fund of Norway. We are continuing this tradition by also introducing a resource rent tax on aquaculture, which will make it possible to create employment and generate earnings, while local communities and society as a whole are also able to receive a share of this value by making coastal areas available to the industry,” Vedum said.
“Significant value and local employment are created when skilful and industrious people are granted access to our fjords. When there are very high profits from this value creation, parts of these profits are accrued to the local communities and society as a whole, and can be used for funding good schools, a good health care system, elderly care and good welfare services throughout the entire country,” he added.
The government proposes setting the tax rate at 35%, with revenues based on the market value when fish are removed from the pen, which the companies themselves will set for 2023. From 2024, its aim is to establish an independent price board.
It said that a standard deduction of NOK 70 million means that only companies with significant profits will pay resource rent tax. The tax will enter into force from 1 January 2023.
Government sent a proposal for a resource rent tax on aquaculture for consultation prior to presenting the National Budget for 2023. The Ministry of Finance received about 420 consultation submissions.
“While the basic model remains in place, we have listened to the submissions from the consultation process. We have placed particular emphasis on the arrangement ensuring continued growth, while a share of the resource rent from the aquaculture industry will also accrue to the society as a whole,” Støre said.
The proposal sees host municipalities and counties receive more revenues than they do at present. This will be achieved through a significant increase in the production tax (up to 90 øre per kg) and by increasing the municipal sector’s share of the auction revenues etc. from 40 to 55%.
To ensure that the entire aquaculture region receives a greater share than it does at present, the government proposes the share of the Aquaculture Fund that is distributed to the counties is increased from 12.5 to 20%. Additional appropriations will ensure the municipal sector receives half of the gross revenues.
“It has been of vital importance to ensure that the host municipalities receive a greater share of the revenues, which they can then spend on schools, elderly care and other important welfare services for their citizens. At least half of the revenues that come in will be returned to the municipal sector,” Vedum said. “Our goal is that those who make the fjords available to fish farmers, will derive greater benefit than what they do under the present arrangement.”
Støre highlighted that aquaculture “is one of Norway’s largest and most profitable industries” and that the average returns generated during the last decade have been 3-4 times higher than in manufacturing.
“A larger share of this should accrue to society as a whole, while at the same time we also support the industry continuing to develop and create jobs and value along our coast into the future,” he said.
