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.

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.