Confused picture on Norway’s salmon tax
SHARE prices for Norway’s leading salmon companies have been on a rollercoaster ride following mixed signals from the country’s coalition government over its proposed salmon tax.
The salmon tax or “ground rent tax” is intended to charge fish farmers for the natural resources they are using, but the industry has complained that the tax as proposed, which would effectively levy 40% of the producers’ revenue, is being set at too high a level.
In late January, Geir Pollestad, a Centre Party politician and a member of the Parliamentary
Standing Committee on Finance and Economic Affairs, said in an interview with the newspaper Dagbladet, that the government would approach the issue with an open mind, saying the 40% figure was off the table.
Salmon company shares such as Mowi, SalMar and Lerøy Seafood Group shot up as a result of those comments, with a number of brokerage houses speculating that the rate could come down to as low as 25% or less.
Reports from Oslo suggested the ground rent tax could be around the 15% mark, while other analysts suggested a rate of around 25%.
Brokerage house DNB Markets said the sector should start to factor in a lower figure than 40%.
Britain’s Barclays Bank also set new higher share price targets on all three companies.
Shortly afterwards, however, Finance Minister Trygve Vedum – who also leads the Centre Party – took issue with Dagbladet’s interpretation of the interview. Vedum, speaking to Finansavisen and e.24, two of Norway’s leading financial news outlets, said his view was that the original figure of 40% should remain.
He told e24 that the government did not want to base the tax on a system where, in years when earnings were poor, companies paid the same amount as when revenues were at a high level.
The tax, as currently proposed, is calculated to earn Norway’s Treasury NOK 4bn a year (around £335m).
But Vedum also explained that the proceeds would change from year to year, adding that if profits were high the government, the salmon farming communities and the industry would benefit at the same time.
Vedum told Finansavisen more or less the same, stressing that the ability of companies to pay based on their profits would be the key.
Some amendments are expected and his final proposal is due to be put before Norway’s Parliament, the Storting, probably in late March.
Trygve Slagsvold Vedum