Norwegian salmon producer Nova Sea said it is putting the construction of a new NOK 3.3 billion (€314 million/$307 million) processing plant and hatchery on hold following this week's government proposal calling for a new tax on Norway's salmon industry.
The proposed tax, which must still be approved by the Norwegian Parliament, is set to take effect on Jan. 1, 2023 and will be applied to volumes above 4,000 or 5,000 metric tons.
The plans will hoist the total tax rate for salmon and trout farming to 62 percent, producers calculate.
"This in turn will significantly weaken our ability to handle new investments," Nova Sea Managing Director Tom Eirik Aasjord said in a media release.
"In particular, this will affect investments on land, as tax deductions will only apply to investments in marine production itself. It is not in marine production that we have the biggest investments going forward."
The investments would have created more than 100 new skilled jobs and benefited surrounding districts, Aasjord added.
His company unveiled plans in February to build a new processing plant and hatchery at Lovund in northern Norway at a cost of NOK 1 billion (€95 million/$93 million).
Aasjord said the industry's operating conditions were completely turned upside down within minutes on Wednesday, citing an explosive increase in its production costs over the past two years.
"Our customers in Europe, and in the rest of the world, are in the middle of an extreme situation with high inflation, where future purchasing power is threatened."
Nova Sea Chairman and owner Aino Olaisen acknowledged firms need to pay more in tax for the use of land and sea, and that Norway needs more income but said the development leaves her company unable to proceed with the growth plans.
"What is particularly important to us is that the structure of the taxation does not put jobs and local communities at risk."
- 'The government is setting sea against land': Norway land-based salmon farmer Gigante voices shock at tax news
- 'It is clear that we are very concerned': Grieg Seafood puts all investment decisions on hold amid proposed Norway salmon tax hike
- Tax hike bombshell presents opportunity to buy shares of Norwegian salmon firms, says investor
- Atlantic Sapphire escapes impact of devastating Florida hurricane
- Mowi CEO on Norway salmon farming tax proposal: 'We feared the worst, and it has come'