Norwegian Voters Look Set To Reject High Tax Burden

by Ulrika Lomas, Tax-News.com, Brussels

11 September 2001

According to the latest reports, Norwegian voters look set to deliver the ruling Labour party its worst election results for nearly 100 years as a result of the punitive taxation regime imposed by the party.

Despite the fact that the country is cushioned by oil money (almost 3.2 million barrels are pumped per day, which is worth about £7,000 per citizen, per year), and actually has problems trying to spend the money it makes, Norwegian taxes are among the highest in Europe, a situation which has incensed taxpayers, and brought Labour to its lowest popularity level since the 1920s.

Most recently, the party has come under fire for the imposition of value added taxes on services, but its treatment is by no means consistent: aerobics classes were exempted after protestors argued that it was absurd to tax health, but karate enthusists must still pay the levy.

The Labour party's declining popularity means that under Norway's proportional representation system, the nation faces the possibility of a fragmented parliament, as none of the other parties are sufficiently large or powerful to present a challenge to Labour's predicted 25% of the vote.

However, experts believe that if the Conservatives, who have promised tax cuts and public sector reform, are backed by enough of the smaller parties, they may be able to reclaim power for the first time in a decade. Jan Petersen, head of the Conservative party, was cautiously optimistic last week, speaking to press as he cast his vote in Oslo: 'There's a good chance of a change of government,' he said. 'But the race is very even.'

Evidence has also been found to suggest that Norwegian citizens are voting with their feet as a result of the country's high taxes, as a report published by the Norwegian Investors Forum in July revealed that between 1993 and 1999, more than 2000 HNWI had left Norway to settle in countries with more forgiving tax regimes.

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