On 28 March 2023 the Government of Norway presented a bill proposing a resource rent tax on aquaculture. The intention of the proposal is to ensure that local communities along the coast and society as a whole receive a greater share of the value that is created by the fish farming industry. The host municipalities will receive more. The increased revenues will enable the municipalities to invest more in schools, elderly care and other important welfare services for their citizens.
According to Prime Minister Jonas Gahr Støre (Labour Party), “We have a long tradition in Norway in which value that is created from using our common natural resources shall benefit society as a whole. Access to our common natural resources has enabled this industry to generate particularly high earnings. All of us should be able to derive greater benefit from the significant value that is created. It is now the time to introduce a resource rent tax for the aquaculture industry.”
Minister of Finance Trygve Slagsvold Vedum (Centre Party) added: “The Norwegian model, which involves society as a whole receiving a share of the profits generated from the utilisation of our natural resources, has served us well. The resource rent tax on petroleum has played an essential role in building up the Government Pension Fund of Norway. We are continuing this tradition by also introducing a resource rent tax on aquaculture, which will make it possible to create employment and generate earnings, while local communities and society as a whole are also able to receive a share of this value by making coastal areas available to the industry.”
“The aquaculture industry is one of Norway’s largest and most profitable industries. The average returns generated in this sector during the last decade have been 3-4 times higher than in manufacturing. A larger share of this should accrue to society as a whole, while at the same time we also support the industry continuing to develop and create jobs and value along our coast into the future,” Støre says.
One advantage of the resource rent tax is that it automatically adapts to profits in the industry. The objective is not to collect a specific amount in tax revenues, but rather a share of the value created.
The Norwegian government’s proposal pivots around the concept of ‘resource rent tax’, which views natural resources as belonging to the society as a whole. The production of natural resources such as oil, gas or hydropower can often generate extraordinary profits because production is based on a finite resource. These extraordinary profits are often referred to as resource rent. A resource rent tax (special tax) enables a share of these profits to be returned to society as a whole.