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Norway’s proposed aquaculture tax could harm industry, says SalMar

Norwegian fish farming company SalMar warned that the government’s proposed 40 per cent tax on aquaculture will have a “negative ripple effect” on the industry.

The Government of Norway announced Sept. 28 that it has sent for consultation, a proposed resource rent tax on aquaculture companies commencing Jan. 1, 2023. The expected revenue from the proposed tax will be NOK 3.65 billion and NOK 3.8 billion (US$347 million and US$361.2 million). A key element of the proposal is that the local communities which make natural resources available should be guaranteed a share of the resource rent.

Linda L. Aaase, chief executive officer of SalMar, said the proposed tax will raise the current aquaculture tax to 62 per cent.

“This is a tax on aquaculture companies creating value and workplaces on the coast of Norway,” Aase said in a press release today. “A tax like this will have significant negative ripple effects for all adjacent industries of the aquaculture industry and the jobs it creates.”

Aaase did not elaborate on the matter further but said her company will later provide “additional information on the consequences of such taxation for our group operations once further details of the new tax have been clarified.”

Following the consultation, the government will return to the Storting (the supreme legislature of Norway) with a bill that will enable the rules to apply from 2023 onwards.

The proposal covers the production of salmon, trout and rainbow trout and involves the taxation of resource rent at an effective rate of 40 per cent. “The rules are formulated in such a way that only the largest operators will pay resource rent tax. This is done by granting a tax-free allowance of between 4,000 and 5,000 tons,” a government press release.

The Norwegian government said that Statistics Norway has identified substantial resource rent in the aquaculture industry over several years.

“Resource rent in aquaculture has risen strongly since 2012 and for the period 2016 to 2018 it has totalled just over NOK 20 billion, which is on a par with hydropower. The resource rent for 2021 is estimated at NOK 11.8 billion. It is therefore reasonable for society to receive a share of the extraordinary return generated through the exploitation of these resources,” the government said.