Fossil energy – Norway
Norway’s government has proposed overhauling taxation of its oil and gas firms by scrapping some incentives, it said in a surprise announcement on Tuesday, further heating up a pre-election debate over the future of the country’s top industry.
If passed by parliament, the proposals would remove deductions that some economists say encourage excessive risk-taking by oil firms, and would also cut reimbursements for exploration costs.
“The changes mean that the tax conditions will be tighter and have a more neutral effect on investments. At the same time, we are making sure that companies have predictable framework conditions,” Finance Minister Jan Tore Sanner said.
Under the proposal, a special tax rate paid by oil firms will effectively be raised to 71.8% from 56% currently, but the overall tax rate would remain at 78%, the finance ministry said.
The proposal would also phase out the reimbursement system for exploration costs, which was introduced in 2005 to reduce financial risk, especially for smaller players, and to encourage exploration.