Northern Norway has been experiencing a decline in population, which has led to a range of problems, including economic issues. Statistics Norway recently released data that shows that the population is dropping in every single northern county, marking the first time this has happened in 12 years. To make matters worse, the population that remains is aging.
Understanding Why Northern Norway Matters to the Country
To understand why northern Norway may become a tax haven to continue to function, it is important to understand why northern Norway matters to the country so much. The region is responsible for significant portions of the country’s export revenue, supplying seafood to vast areas of the world. It also contains the Russian border, along with increased military exercises.
How a Tax Haven Could Help
Proponents behind the idea of turning northern Norway into a tax haven argue that this could help save the region. The most prominent mention of this possibility came recently when Arne Holm, who is the editor of the High North News, wrote an opinion piece outlining his thoughts and the reasons that a reduced northern tax could be beneficial. Part of this comes from the geopolitical and economic importance of northern Norway for the country as a whole. According to Holm’s piece, the region would need about 25,000 new employees in just a few years to continue achieving those benefits.
There is already low-income tax in Finnmark and portions of Troms, the first of which is the country’s most northern and eastern county. Proponents suggest expanding this to other large cities in northern Norway.
The idea would be that by offering low tax rates in strategic northern Norwegian locations, it would help balance the gaps in salaries between those in the North and those in the South. It could also be used strategically to encourage population growth.
The Other Side
Those against the idea of reducing taxes in northern Norway feel that it may not really serve a purpose. Bard Hardstad from the University of Oslo is an economist and against the tax haven idea. He does not feel that the potential benefits are obvious. He also cautions that Norway would need to look into the potential cost to the rest of the country’s society. Hardstad additionally argues that a better alternative would be to just offer a one-time payment to those who are willing to relocate to the north.
Others, like MP Dagfinn Olsen, argue that instead of offering tax breaks, the northern regions should work to make themselves more attractive. He is a northerner and feels that Norwegians as a whole must be more positive in their conversations about the north.
For now, the idea of making northern Norway a tax haven is still just a proposal, and there is no telling what will happen in the future.
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