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Friday, April 19, 2024

Members of Parliament hit with some big, and punitive, tax bills

Nearly 40 members of the Norwegian Parliament have been hit with claims for back taxes, following an extraordinary audit by state tax authorities. The MPs were all found to have underpaid tax on the advantages of having a state-paid commuter residence in Oslo, and some are being ordered to pay punitive fines as well.

Nearly 40 Members of Parliament now have to pay back taxes and even some punitive taxes, for failing to report the income advantage of having free commuter housing here in Oslo. PHOTO:

It’s part of a major clean-up after a series of scandals at Stortinget (Parliament) in recent years. The scandals have involved huge budget overruns on projects that went out of control and, more recently, individual cases of MPs’ generous pay and benefits backfiring on them.

In some cases, MPs leaving Parliament have wrongfully accepted severance pay when it wasn’t warranted. Several, including former MPs Jan Arild Ellingsen and Per Roar Bredvold of the Progress Party, have already paid back hundreds of thousands of kroner after newspaper Dagens Næringsliv (DN)‘s series of articles on questionable payouts. In both cases, the former MPs continue to receive their parliamentary salaries (now just over NOK 80,000 a month) even though they were earning income from other sources.

The scandals grabbing the most media attention, though, involved MPs who accepted free commuter housing in Oslo in addition to their salaries if they were registered as living in their home districts. Several also had homes in Oslo that they rented out while living for free in state-owned apartments where all monthly expenses for electricity and broadband, for example, were also covered.

State tax auditors have now concluded that 38 MPs failed to adequately report details of their housing situation, and didn’t have enough income tax withheld or pay sufficient tax on the commuter housing advantage. In 11 of the 38 cases of back taxes owed, MPs have also been ordered to pay extra (punitive) tax for failing to fully report all details of their residence and financial situation.

The Labour Party politician elected as president of the Norwegian Parliament last fall, Eva Kristin Hansen, had to resign after just a few weeks, after newspaper Adresseavisen reported how she’d been using a free commuter apartment in Oslo when she actually lives relatively close to the capital. Several other MPs are also now getting some big bills for back taxes. PHOTO: Stortinget/Peter Mydske

The tax authorities from Skatteetaten audited 290 cases involving current and former MPs and politicians attached to the Office of the Prime Minister for the years from 2017 to 2020. All told the claims for back taxes amount to just over NOK 1.1 million.

Administrative officials at both the Parliament and prime minister’s office have also been criticized for failing to better manage housing benefits, or neglecting to withhold enough tax from the politicians’ monthly pay. Both have been unusually at odds with tax authorities, with newspaper Aftenposten (which revealed many of the troublesome individual tax cases) reporting late last summer that the high-level political administrators argued in favour of the errant politicians, even accusing the tax authorities of misleading them or failing to offer clear rules.

“Skatteetaten has changed its interpretation (of tax rules), which means the commuter housing situation can result in large and unexpected tax bills for individual politicians,” Anne Kristin Hjukse, communications chief at the Office of the Prime Minister, told Aftenposten. Those bills are now being handed out.

The tax authorities have prevailed so far, with the director of Skatteetaten branding some of the income underreporting as “serious.” Being hit with extra tax in addition to back taxes “amounts to a punitive fine,” tax chief Nina Schanke Funnemark told Aftenposten on Thursday. She admits, though, that the tax authorities also provided some wrong information along the way.

“I can understand that people (the MPs getting hit with big bills for back taxes) are furious,” Parliament President Masud Gharahkhani of the Labour Party told Norwegian Broadcasting (NRK). “I also register that Skatteetaten has acknowledged that they should have guided Parliament better on these matters.”

The new president of the Parliament, Masud Gharahkhani of the Labour Party, has been playing a major role in reviving public confidence in political leaders. PHOTO: Stortinget/Peter Mydske

The tax bills and punitive assessments handed out now affect MPs from most all the nine parties in Parliament. Included among them are three MPs from the Socialist Left Party (SV): Torgeir Knag Fylkesnes, Freddy André Øvestegård and Mona Fagerås. Fylkesnes, for example, is from Tromsø and was granted a commuter apartment in Oslo, but he partially rented out his home in Tromsø and had bought a condominium in Oslo that he rented out.

Culture Minister Anette Trettebergstuen of the Labour Party from Hamar also got a bill for just under NOK 100,000, even though she claims she’d tried earlier to pay tax on the benefit of her free accommodation in Oslo. “This is sour money I have to pay now, but it’s correct and I’ll course pay it without too much griping,” Trettebergstuen told NRK.

“This is all very uncomfortable,” said former Education Minister Torbjørn Røe Isaksen of the Conservative Party, who now has to pay extra and punitive tax on NOK 220,536 of income advantage he allegedly didn’t report. “I have some good clarification for how this happened, but it’s my responsibility,” Isaksen told Aftenposten.

On Thursday came news that MP Sveinung Rotevatn of the Liberal Party also was ordered to pay punitive tax. Aftenposten reported how he was still officially registered as living at his parents’ home in Vestlandet, where he had no expenses, while he’d been granted a fully-paid commuter home in Oslo.

“This is a tax scandal, and we can’t have MPs with so many special privileges,” MP Bjørnar Moxnes of the Reds Party claimed this week. Aftenposten commentator Kjetil B Alstadheim, however, notes that in the midst of all the “tax mess,” Norway’s control systems have functioned. “What has all the politicians’ tricks and poor bookkeeping shown?” he asked rhetorically as early as last summer. “That Norway has a system that works.”

Even though voters may have lost confidence in some individual politicians, the political system itself has not been weakened: A critical media reported on various cases over the past year, administrators responded and admitted mistakes, the authorities and police investigated, the Parliament and prime minister’s office cooperated and launched clean-up programs regarding pay and benefits issues, and some benefits are being retracted.

“Therefore all these cases should contribute to more confidence in the liberal democracy that Norway is,” Alstadheim wrote, “not less.” Berglund



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