Today, with a narrow majority, the Norwegian Parliament has passed an additional resource rent tax on aquaculture in Norway, with a tax rate of 25%. This is in addition to the regular corporate tax and means that the marginal tax rate on aquaculture will increase by over 100%, from 22% to 47%. The new tax will apply retroactively from January 1, 2023, and is being implemented without the involvement of stakeholders and broad political consensus that traditionally characterize major changes in the tax system and framework for Norwegian businesses.
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. Today's tax decision will have a significant distorting effect. The high tax level and the unfavorable design of the new tax will withdraw a substantial portion of investment capital from the industry. 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. The tax will affect the entire value chain, especially the land-based industry and suppliers. The lack of proper assessment and the remaining uncertainties in the decision-making process only amplify the uncertainty.
Given these circumstances, SalMar will continue to actively collaborate with industry organizations to describe the actual situation and the challenges the industry is currently facing. Through close and fact-based dialogue with authorities and decision-makers, we look forward to promptly restoring a tax system and tax level that is appropriate for Norwegian aquaculture.
The aquaculture industry has clearly and openly been willing to contribute more in terms of taxation. However, it must be at a sustainable level with a model that is tailored to the industry.
This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.
