The Office of the Prime Minister of Norway has decided not to challenge tax authorities’ claims that its administrators failed to withhold enough tax from some of those in politically appointed positions, and failed to pay high enough employer fees.
The prime minister’s office (SMK, Statsministerens kontor) still doesn’t agree with the tax authorities’ interpretation of the rules, but will go along with it. So has the administration at the Norwegian Parliament (Stortinget), which also got caught up in a major scandal that involved both exploitation of benefits and sheer confusion over how the value of those benefits are calculated and taxed.
State tax agency Skatteetaten claims SMK owes an extra NOK 195,889 to cover the fees employers must pay to help cover employees’ social welfare benefits in Norway, such as paid sick leave and disability. SMK has countered that the rules were unclear and that guidance from the tax authorities was insufficient, also for the individual politicians involved who face claims for back taxes.
SMK nonetheless determined that it’s “not natural” for it, as employer of all the government’s ministers and state secretaries, to take the dispute further to an appeals commissions. The entire issue, mostly involving free commuter housing and transportation for politicians from outside Oslo, also damaged public confidence in political leaders.