Can Norwegian Investors Trust the Government’s Tax Policy?

The governing parties wanted to reassure Norwegian owners. It’s just going so well.

It’s like the boy next door who always kicks you in the shin, but then promises not to do it again…

This is how a Norwegian investor describes the government’s tax policy. The person concerned is not alone in being skeptical.

Another describes the mood among most people he talks to as “no confidence” that the government will not increase owner taxation in the upcoming budget.

After the government’s budget conference in March, the Labor Party and the Center Party wanted to send a clear signal to Norwegian business: No new tax bombs in the upcoming budget.

The government had a problem.

The combination of tax policy, hard-hitting rhetoric and uncertainty about the future created an impression in many owner circles that “anything can happen now”.

The tax move was supposed to calm the mood and give a new, fresh start. The message was:

• No new tax surprises.
• The total tax burden must remain fixed.
• Only “adjustments” related to increased redistribution.

Breathe with your stomach because we have heard you, should have left an impression after an autumn and winter where an almost united business community collapsed – and the billionaires flowed from Norway to Switzerland like balls out of a cracked sack. “What the hell are all these Norwegians doing here all of a sudden?” as a Swiss is said to have said at a meeting.

The government’s message may have caused some to pause the relocation notification. For a while.

In the communities that work with wealthy owners – typically advisers and tax lawyers – some believe to be tracking some change. More are pending.

At the same time, there is uncertainty about what the government actually meant by the move.

Prime Minister Jonas Gahr Støre told VG that “new large tax increases are not in our plan”. At the same time, he added: “We always have adjustments to ensure better distribution (…).”

The latter in particular can be read as an opening for some taxes to increase.

The move to Switzerland is not over.

In a survey by two master’s students at NHH, six out of ten countries state that they have considered emigration. Many of the largest owners also have children who can move more easily because they are in the establishment phase.

But much will depend on the national budget this autumn.

I have previously written about how the government’s message in March was precisely calibrated. They have tied themselves to the mast.

On the other hand, the government has gone to the election on a clearer redistribution policy. It is completely in line with the tax promise from March if, for example, owner taxation is “adjusted” next year, i.e. somewhat stricter.

At the same time, the government does not want to reinforce the impression that they are in some kind of war with private business. And especially in the Center Party, there is a widespread opinion that owner taxation is now close to a pain point.

The budget for 2024 is not ready until December.

Before that, it must be negotiated. With the Socialist Left Party and newly elected party leader Kirsti Bergstø – who with smoke and travel made it unequivocally clear where she stands in the debate.

For SV, it is an independent point that taxes must rise for the richest. Only in this way can we ensure a better distribution.

It will be an additional challenge for the government. Because if the boy in the neighborhood stops kicking you in the shin, it doesn’t help much if he steps aside so his mate can get in some perfect hits instead.