The government must regain the trust of the business community, believes the NHO boss. He warns the government against a new round of surprise tax measures.
On Sunday, the government will meet for the so-called March conference at Klækken outside Oslo. This is the start of the budget work for 2024. Tough ceilings are expected. The ministers have to fight for their budgets, and the rise in prices has made everything more expensive.
– Around us, the war in Ukraine is having visible effects in many places. Refugees come to the local communities, but we also see it in the budget work, Støre tells the press before the government starts the budget conference.
– Taking responsibility in these times and ensuring that people have security in their lives is the government’s most important responsibility, continues Støre.
NHO warns the government against easing the bill on business. The employer’s organization believes that the way the government collected tax dollars from owners and companies last time, eroded trust.
“In the 2023 budget, major tax increases were introduced or announced, some without investigation and with retroactive effect. Perceived uncertainty among investors can postpone or stop investments with profitable jobs and large ripple effects. The 2024 budget must restore the confidence of owners and businesses”.
This is what NHO writes in its input to the government ahead of the budget conference.
Sent the bill to business
The governing parties and SV increased the general tax level in Norway by around NOK 46 billion from last year to this year. The vast majority of this was increased business taxation, and particularly on the power industry.
Finance Minister Trygve Slagsvold Vedum (Sp) has told Aftenposten that the aim is to avoid increasing the tax level further.
– What he says there, we must have confidence that it will be carried out. That is what trust is all about, says Ole Erik Almlid.
Recently, things happened in an untidy way, he believes. The NHO chief points out that the government’s salmon tax was given effect from 1 January, even though the consultation deadline expired a few days later. How the tax is to be calculated has not yet been decided by the Storting.
Increased employer’s tax on high salaries has not been investigated and is not mentioned in the government platform, nor in any party’s political programme. Increased tax on hydropower was given retroactive effect.
– Many people knew about it, says the NHO boss.
He emphasizes that both the dialogue with and the signals from the government have improved since the last budget round.
Early in the new year, Industry Minister Jan Christian Vestre (Ap) and Prime Minister Jonas Gahr Støre (Ap) took to Facebook with the following message:
“Those who build companies, invest money, create jobs, deserve respect”, was the message.
– You shouldn’t actually underestimate the value of saying things in a nice way, says Almlid.
Waiting for a more business-friendly budget for 2024
But it is politics that decides.
NHO believes that tax on companies and ownership should be reduced next year, and in any case not increased – completely contrary to the input from LO’s largest confederation, Fagforbundet.
– We are waiting, but hopefully the next budget will be better. For us, it can be a bit boring, says Almlid.
Increased tax on hydropower was given retroactive effect. With that, the government was “close to the outer limit of the Constitution”, the Ministry of Justice’s legal department believed.
In the letter to Vedum, NHO is “very concerned” about the lack of understanding of predictability in the legislation that this process expresses.
They also show that the oil tax was changeddespite assurances that it would be fixed.
In quite strong terms, NHO warns the government against repeating this type of tax measure. They point out that predictability is indicative of countries that are good to live in and invest in: “We want Norway to continue to be such a country, but then there must not be a fear of what next year’s tax and levy system will bring”.
Requires tax clarification
One of the tax measures NHO is most critical of is that the government introduced increased employer’s tax on salaries over NOK 750,000.
In the letter, NHO points out that the levy interferes with wage formation, and that the parties in working life were nevertheless not included in the assessment.
“It is absolutely necessary that the government makes it absolutely clear as soon as possible that it will not continue the measure in 2024,” it says. NHO fears that the fee will become permanent.
State Secretary in the Ministry of Finance Lars Vangen (Sp) writes in an email:
– The government has emphasized that the increased fee is temporary. The final tax and levy scheme for 2024 will not be ready until the state budget is presented in the autumn.
Vangen points out that the government had to make many tough priorities in the 2023 budget. The aim was to ensure a responsible use of oil money in order to reduce price inflation and the pressure on interest rates.
– There were also extraordinary expenses related to, among other things, the war in Ukraine, electricity support for households and emergency preparedness. This temporary change to employer contribution for the highest salaries must be seen as part of that picture, he writes.
