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Friday, March 29, 2024

Corona outdates latest tax lists

NEWS ANALYSIS: Norwegian tax authorities released results from last year’s tax returns on Tuesday, but never before have they been as instantly outdated and even misleading. The Corona crisis has likely reduced many of the fortunes listed for tax year 2019, and the tax-adjusted figures often fail to reveal actual income and market-value net worth anyway.

The Corona crisis has also greatly reduced the use of cash this year, making it easier for tax authorities to track everyone’s personal transactions when they have to use debit- or credit cards. PHOTO: Norges Bank

Norwegian media nontheless devote quite a bit of attention to the annual public accounting of income, net worth and how much taxes were paid by all individual taxpayers and companies. Such figures are not private matters in Norway, which has a long tradition of revealing what everyone contributes to the common good. Measures to offset the downside of public snooping in the electronic age were introduced in 2011 and now taxpayers can find out who may have clicked in to see their results. That’s put a damper on the curiosity of neighbours, friends and enemies.

All told the authorities raked in NOK 637 billion in income- and fortune tax revenues for 2019. NOK 538 billion came from 4.2 million individual taxpayers in the country and NOK 98 billion from 345,000 companies, not including tax revenue generated from oil operations.

Norwegians are traditionally most curious about which individuals rank on the lists of those showing the biggest incomes and net worth, even though the tax-adjusted numbers don’t always reflect reality. This year the young heir to the SalMar farmed salmon empire topped the list, with 27-year-old Gustav Magnar Witzøe listed as having a taxable fortune of NOK 20.9 billion (USD 2.4 billion). His annual income was reported to be NOK 182 million, fourth highest on the list.

Witzøe, who still lives on the island of Frøya in Trøndelag where SalMar was founded, also ranked as paying the most taxes of anyone else in Norway: NOK 235 million. That’s the one key figure of the three revealed in the tax lists that isn’t altered by deductions, deferrals or other measures that can lower taxable income and fortunes. It’s also of great interest among many Norwegians who think the wealthy should pay the most tax. Those known to be wealthy but with questionably low income and tax bills raise eyebrows.

Second wealthiest, according to the figures for taxable net worth, was industrialist Kjell Inge Røkke, the fisherman-turned-offshore investor who also made a fortune after taking over the Aker heavy industry businesses years ago. Røkke was knocked out of the top spot by Witzøe, but wasn’t far behind with a taxable fortune of NOK 19.4 billion. Røkke never appears on the list of those with the highest incomes, reporting zero income yet again, but he did pay NOK 165 million in taxes.

Then came a fairly large fortune gap between Røkke and the third Norwegian on the list, real estate investor and developer Ivar Erik Tollefsen. Best known for buying and now redeveloping the former US Embassy in Oslo and building up a rental apartment empire, Tollefsen was listed with net worth of NOK 9.2 billion.  He also ranked third in income (behind retired industrialist and philanthropist Trond Mohn and shipping heir Christian Gruner Sundt) with NOK 238 million.

Others listed with the next-highest fortunes included grocery tycoon Odd Reitan (NOK 6 billion), tobacco heiresses Katharina and Alexandra Gamlemshaug Andresen (just under NOK 5.9 billion each), and Mohn’s son Frederik Wilhelm Mohn (NOK 4.99 billion). Rounding out the Top 10 in terms of net worth were Reitan’s sons Magnus and Ole Robert Reitan (with around NOK 4.8 each) and Trond Mohn with NOK 4.5 billion.

Those paying the most tax were, in order, Witzøe, Trond Mohn, Røkke, Tollefsen, Magnus and Ole Robert Reitan, investor Bjørn Rune Gjelsten, Sundt, Frederik Mohn and real estate investor Tor Øivind Fjeld.

The Corona crisis and resulting economic upheaval of 2020 are expected to result in significant changes on next year’s list of Norway’s wealthiest. Corona may have increased the fortunes this year of the Reitans and other retailers in Norway who’ve benefitted from Norwegians having to stay home to do their shopping, instead of while out traveling, at airport tax-free shops or driving over the border to Sweden.

Those in the travel and hotel industry have likely seen their fortunes decline dramatically, also perhaps those in the shipping industry. The new list is among the first not to include a single large shipowner among Norway’s wealthiest.

Hotel tycoon Olav Thon, who often ranked in the Top 10 before turning over much of his fortune to a charitable trust, ranks as 18th wealthiest on the new list for 2019 but his Thon Hotels have been all but shuttered by the virus. Petter Stordalen, the high-profile real esstate investor who controls the Nordic Choice hotel chain and other travel ventures, did not appear on the most recent list of the 50th wealthiest.

For a look at the lists compiled by state broadcaster NRK, click here (external link, in Norwegian).

NewsInEnglish.no/Nina Berglund

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