The Norwegian government has presented a NOK20bn (USD2.89bn) financial aid package in a bid to help struggling businesses navigate the stormy economic seas.
“These are the strongest Norwegian measures against unemployment for more than 30 years, and among the most far-reaching fiscal measures taken internationally,” Prime Minister Jens Stoltenberg said at the Monday press conference he held together with the Finance Minister Kristin Halvorsen and the Minister of Transport and Communications Liv Signe Navarsete.
The government’s aid package consists mainly of new spending measures aimed at boosting the economy. However, NOK3.25bn has been set aside for targeted tax relief for trade and industry. Healthy petroleum revenues, which are expected to increase by NOK43bn from 2008 to 2009, will also be used to offer wide-ranging measures for employment, welfare and the environment.
“We [are introducing] cyclical tax relief for 2008 and 2009 in order to help companies that are profitable in the long run through difficult times,” said Halvorsen.
“Our proposal will give such companies a temporary possibility to re-allocate deficits of up to NOK5m. In total for both years this will mean at least NOK7bn in lower taxes and enhanced liquidity for these companies. The result in 2009 is expected to be NOK3.25bn in reduced tax revenues,” he explained.
The government also announced improvements to the ‘SkatteFUNN’ scheme, which allows companies to apply for tax deductions for their research and development expenditures.
Halvorsen continued: “We have been in close contact with trade, industry and organisations to find out what is needed in order to prepare an optimal package of measures. We have had a good dialogue with the opposition, which is reflected in the government’s proposal. The government and Norges Bank (Norway’s central bank) has already carried out measures aimed particularly at the finance sector and the money and credit markets.”
The package presented by the government is one of a series of expected packages.
On February 9, the government will propose new measures to increase the lending capacity of Norwegian banks, to make it easier for trade, industry and households to obtain new loans.
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