Faroe Island-based salmon farmer Bakkafrost is laying off 140 employees in its value-added products (VAP) division because of the impact of a Faroese tax hike on its sales.

Earlier this year, the Faroese government approved a new progressive tax rate on the country's salmon farming sector, lifting the top tax rate to 20 percent.

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The move is impacting Bakkafrost's contracts, and for 2024 it has signed contracts covering around 9 percent of the expected harvest volumes in the Faroe Islands and Scotland, compared to 22 percent at same time last year.