Norway should tax salmon farming harder, says commission

[OSLO] Norway, the world's biggest salmon producer, should take more of the profits from fish farming by introducing a new natural-resource tax, a government-appointed commission said.

The Conservative-led coalition set up the commission last year after the opposition pushed for the state to take a larger slice of the profits from Norway's biggest export industry after oil and gas. But it's unclear how the government will act on the advice after most of its member parties have come out against such a proposal.

Salmon farmers including Mowi ASA, the world's biggest, fell in early Oslo trading.

The majority of the members on the commission, led by economics professor Karen Helene Ulltveit-Moe, proposed creating a 40 per cent natural-resource tax based on farmers' profits. The commission also recommended eliminating the property tax on fish-farming facilities, according to a statement on Monday.

The new levy would provide tax revenue of about seven billion kroner (S$1.04 billion) a year, although that figure should be expected to fluctuate, the commission said.

A minority of the commission's members opposed the recommendation and mostly favoured keeping the current framework for the industry.

Mowi fell as much as 3.1 per cent, trading 1.2 per cent lower as of 9.02am. Salmar ASA fell 1.5 per cent, Leroy Seafood Group fell 1.6 per cent and Norway Royal Salmon 1.8 per cent.

Norway has extraordinary natural-resources taxes on oil and gas production, as well as hydropower. Such taxes are typically based on economic activity tied to exclusive rights to use geographically-bound natural resources. Norway's fjord-ridden coastline is one of few environments where conditions are ideal for salmon and trout farming.

Norway produced 1.1 million tonnes of Atlantic salmon in 2018, more than half the global supply and almost twice as much as Chile, the second-biggest producer, according to Mowi ASA.

Oslo-listed salmon farmers have seen spectacular gains thanks to higher prices and restraints on supply over the past years. That growth has slowed in the last year amid a retreat in prices.

BLOOMBERG