Cermaq warns of salmon tax consequences
A senior Cermaq executive has spelt out a number of likely consequences if the Norwegian government decides to implement its salmon tax without changes.
Lars Galtung, head of sustainability and communications at the company, accused the government of rushing through its proposals for a so-called “ground rent” tax without due consultation.
He hoped the Finance Ministry would appreciate that cultivating salmon was not like producing oil, gas or wind power.
Galtung said; “The salmon is created – nature is reproduced – at a cost of around NOK 50 per kilo [£3.96]. Production is not tied to one place in the same way as the aforementioned natural resources; it is relatively mobile and can be moved on land, at sea or other places where farming takes place close to the coast.”
He warned that the proposed tax levels would kill competitiveness and force industry leaders to move out of the country, adding: “The industry will of course never move the facilities located in Norway. But when the tax level becomes twice as high as other countries, growth, technological development and new jobs will go elsewhere.”
Galtung also predicted that the tax will have negative consequences for salmon farming districts.
He said: “The aquaculture municipalities’ income must be maintained with basic rent (given today’s high profitability), but will result in lower growth than previously.
“In 2022, the State had to fork out NOK 800m [£63.4m] in lost auction income to the municipalities due to the ground rent proposal.
“In the long term, the districts will experience a reverse Robin Hood effect in that the state takes most of the new income and distributes it to needy and large population centres such as Oslo, Trondheim and Bergen.”
Galtung said it was important the government ensured a predictable framework, adding that the model was more important than the amount the tax is expected to bring to the Treasury (NOK 3.6bn to 3.8bn, or between £284.8m and £300m).
“In other words, shape and form are more important than substance,” he added.
“Therefore, the industry has proposed a more practical and down-to-earth (Faroes style) model This avoids tax disputes (such as in the case of oil), large bureaucracy and significant administration costs for authorities and industry.”
He concluded by saying that while the tax had been a shock for many coastal communities, he hoped it would all “end as a happy family drama.” with a broad political settlement that ensures predictable framework conditions for society and industry that can contribute to securing more tax income and more jobs for the districts.
Galtung said: “Norway is a coastal and harbour nation. The politicians must make arrangements for there to be many seasons where we can still develop its enormous potential.”
