SalMar warns tax will damage investment

Salmon producer SalMar warned today that Norway’s new ground rent tax will have a distorting effect on the industry.

After a five hour debate, the Norwegian Parliament yesterday approved the tax at a 25% rate. The measure passed with a larger than expected majority of 17, thanks to a late intervention by the Red Party.

The decision effectively means that the larger coastal farming companies, of which SalMar is one, will see their tax take more than double. It is also backdated to the beginning of the year.

SalMar, now the world’s second largest salmon farmer, is so far one of the few companies to openly criticise the vote, although Mowi CEO Ivan Vindheim, expecting the plan to go through, warned on Monday that it would hit investment.

SalMar said the tax had been voted through without either the involvement of the industry or any broad political consensus.

The statement continued: “SalMar has consistently warned against the new tax, which is based on the incorrect assumption that aquaculture food production is a location-bound resource rent industry that consistently generates extraordinary returns disproportionate to the risk involved.

“The tax decision will have a significant distorting effect. The high tax level and the unfavourable design of the new tax will withdraw a substantial portion of investment capital from the industry.”

It added: “This will come at the expense of investments, innovation, and employment in an industry where coastal communities have ensured that Norway has become a global leader.”

SalMar also argued it would affect the entire value chain of suppliers and the land based fish farming industry even though the latter is not subject to the new tax.

The company concluded that it looked forward to the restoration of a tax system and levels that were appropriate for the industry.