– I am frustrated, to say the least. That’s what Hanne Lundberg says. She is the breeder of the future in Gratanglaks and has 7,000 tonnes in the cages. All in all, they employ more than 150 people. This is a large proportion of the municipality’s 1,100 inhabitants. The company already pays over 70 percent tax. The notified ground rent taxation comes in addition. Now the company does not see itself in a position to invest more. – We would have had other conditions to join if it weren’t for the land rent tax, says Lundberg. Photo: Frida Brembo / news This week the state auctioned off new permits for farming. The sum ended at NOK 3.8 billion. Gratanglaks was one of several companies that did not invest this year. – We have no idea where we will end up. What should we do in the years when things are not going well? We know that we are dealing with biology, and the risk is enormous. Seafood Norway believes the sum would have been more than double if it had not been for the government’s new tax proposal. – Drastic for the municipal economy But it is not only the farming companies that complain about increased taxes. The host municipalities also fear how the taxes will turn out. Most of these municipalities are part of Nettverk fjord og kystkommuner (NFKK). They are concerned because several of the municipalities with farming budget with the income the municipality receives from the Aquaculture Fund. Eldbjørg Larsen says they agree that the benefits should be distributed according to the community’s resources, but is concerned that the current arrangement will put the hook on the door for small family-owned farming companies that are cornerstone businesses in society. Photo: Ole-Christian Olsen / news The income for the Aquaculture Fund comes, among other things, from the auctions for new permits for farming. Therefore, the income for the municipalities will be much lower than usual. – So it is clear that this is dramatic for the municipal economy, says Elbjørg Larsen in NFKK. – We are concerned about how it will affect the development of seafood production, jobs and value creation not least. – Get half of what they usually get The proposed ground rent tax will mean that farming companies have to pay 40 per cent of their profits in exchange for being allowed to use Norwegian coastal areas to produce fish. The tax is estimated to give the state between NOK 3.6 and 3.8 billion. Half of this is taken by the state, while the other half – i.e. around 1.9 billion – goes to the country’s municipalities. Previously, only municipalities that had aquaculture within their limit received income from the industry through the aquaculture fund. But if the new tax regime becomes a reality, absolutely all the municipalities in the country will receive more income. – It is part of the package. This will benefit all municipalities in Norway. The host municipality will still be left with more, of course, but everyone gets a boost, says Audun Thorstensen. – If you look at both wind power and aquaculture in context, half of the ground rent tax should go to the municipalities. But the host municipalities are roughly left with only a third. The rest goes to the municipal community, says Audun Thorstensen in Telemarksforsking. Photo: telemarksforsking.no He works at Telemarksforskning, which has calculated the effect of the new ground rent tax. The 1.9 billion that will go to the municipalities is distributed through three schemes: Production tax (approx. NOK 750 million). This is only given to the host municipalities that have farmed. Natural resource tax (approx. NOK 750 million). This is distributed to all municipalities in Norway, based on how large the tax level is in the individual municipality. Additional allocation to the municipal sector (approx. NOK 400 million). This also benefits all municipalities, in equal distribution. If you look at how, for example, the natural resource tax will work out for a municipality like Senja in Troms and Finnmark, they will receive NOK 22 million. – But because Senja has a low tax level, they only get to keep 5 percent of this. That means only NOK 1.1 million in income. A farming municipality will thus retain between 5 and 40 per cent of the income from the natural resource tax. – There are quite a few municipalities that have farming, which will only be left with 5 per cent of this income. – Half of the ground rent tax goes to the municipal sector, the host municipalities get a little more, but a very large part goes to the municipal community. – And that involves a good number of municipalities that are neither near the sea nor aquaculture? – Yes. Among other things, Oslo, which will receive many millions – without my having counted on that municipality. But they have a large population. Senja mayor: – Will lose millions The intention behind the proposal from the government is that coastal municipalities that facilitate the production should come out as well, or better, than the previous model. But the mayor of Senja, Tom Rune Elisussen, does not think that they do. – As I have interpreted the government, it is the coastal municipalities that should come out the best. That is not the reality, says the mayor of Senja, Tom Rune Elisussen. Photo: Pål Hansen / news – It is a reality that only a small proportion benefits the coastal municipalities. – The majority is drawn into the state coffers and delivered to the largest municipalities in the country that do not actually have aquaculture production, says Elisussen. Senja still receives 95% compensation through an equalization mechanism, Thorsteinsen points out in Telemarksforskning. Photo: Pål Hansen / news According to the mayor, large municipalities such as Oslo will fare best when the natural resource tax is to be distributed. – With the new arrangement, we will lose several tens of millions. There is obviously a need to make changes to the facility. Especially when you look at the municipal sector. – The people are the greatest resource In addition to being a board member of NFKK, Elbjørg Larsen is mayor of Herøy municipality. Herøy is also the host municipality for farming. Gratanglaks has 7,000 tonnes of salmon in its cages. She fears that the arrangement of the new taxes could mean that the city gets more than the district. In the worst case, she believes the new tax could lead to evictions. – The biggest resource is the people who live here. If you lose value creation and jobs, you also lose people. And it is the three northernmost counties that go beyond. Herøy consists of several thousand islets and reefs. Several of these are inhabited. Therefore, there are good conditions for salmon farming. Photo: Lars-Petter Kalkenberg / news Larsen points out that when the farming companies do not buy up and invest, jobs are lost. – Not least it affects the supplier industry and others who are tasked with delivering to the salmon industry. The Fisheries Minister is not worried But the Fisheries and Oceans Minister, Bjørnar Skjæran, is not as concerned about the development. – Everyone who has wanted to buy growth has had the opportunity to do so. We have sold approximately 3/4 of what was possible to sell. The Minister of Fisheries and Oceans, Bjørnar Skjæran, says that they will now summarize after the auction and make a decision about what we do with the quarter that is left. Photo: Rebekka Ellingsen / news – This means that there will now be growth and development for the companies that have bid at auction and have been awarded, he says to news. Everything has not yet been said about the tax arrangements that the government is proposing for the farming industry. January 4 is the consultation deadline for the tax proposals. The NFKK, among others, will provide input there. But Gratanglaks stands his ground. They believe the government’s tax policy hinders development. – It will probably stop the development. At least greatly reduced. There is no doubt about that, says Lundberg. – I hope that we will be able to continue with what we are doing, and build the community around us.
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Municipalities without farming may end up making the most from farming tax – news Nordland
