Norway Royal Salmon (NRS) has become the latest fish farmer in Norway to cancel growth plans in response to the resource rent tax proposal unveiled last week.
Earlier this year, NRS purchased 370 tonnes of maximum permitted biomass for a total value of NOK 62 million (€6.2 million). However, the company’s board decided to cancel this purchase over the government’s proposal to impose a resource rent tax of 40 percent and a total effective tax rate of 62 percent.
“Over the past few years, NRS has invested significant amounts in strengthening the value chain through a new smolt facility in Dåfjord in Karlsøy municipality, development of the sea locations and investing in aquaculture at sea through Arctic Offshore Farming. The introduction of a resource rent tax will lead to a significantly weakened investment ability for the company. For the time being, the company’s larger future investments are therefore being put on hold. This means that the planned expansion of the smolt facility in Dåfjord of NOK 400 million (€40 million) is postponed,” the company said in a statement.
Read more: Cermaq freezes investments in Norway
“NRS has a proud history, and over the years we have developed our farming activity in Troms and Finnmark. We want to develop the company further and create jobs at the coastal areas in northern Norway. We are always looking for growth opportunities, but now we don’t dare. A good tax system must be both fair and predictable. The government’s proposal for resource rent tax is neither and puts new investments on hold all along the coast. Such unpredictable framework for the aquaculture industry means that the risk is considered as too high,” NRS CEO Charles Høstlund said.
The decision by NRS comes after fellow Norwegian salmon farmer Mowi condemned the resource rent tax as the “greatest setback” in the history of the country’s aquaculture industry.
On Monday, Cermaq announced it was freezing investments in the country, while the company waits for a “clearer understanding of the announcement last week and the final proposal for resource rent tax.” Similarly, Leroy Seafood, the world’s second largest salmon producer, cancelled the purchase of an additional licence capacity over the “unjustifiable framework conditions for the industry in Norway,” as a result of the proposed tax.