Budget 2012: Steady as she goes / News / The Foreigner

Budget 2012: Steady as she goes. FINAL: Norway Finance Minister Sigbjørn Johnsen presented a tight, but balanced budget today in light of less than expected economic growth. According to him, the Norwegian economy seems to be performing well overall, with GDP expected to rise 2.8% by 2011 and 3.1% by the end of next year. There also appears to be a stable level of unemployment, with expectations that it will remain at 3.25%.

norwaystatebudget2012, sigbjoernjohnsen, norwegianministeroffinance



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Budget 2012: Steady as she goes

Published on Thursday, 6th October, 2011 at 10:00 under the news category, by Michael Sandelson and Lyndsey Smith      .
Last Updated on 6th October 2011 at 18:10.

FINAL: Norway Finance Minister Sigbjørn Johnsen presented a tight, but balanced budget today in light of less than expected economic growth.

Tax
Tax
Photo: Phillip Ingham/Flickr


Food for growth?

According to him, the Norwegian economy seems to be performing well overall, with GDP expected to rise 2.8% by 2011 and 3.1% by the end of next year.

There also appears to be a stable level of unemployment, with expectations that it will remain at 3.25%.

Nonetheless, there is concern that weaker international growth, along with the current international financial market, could affect the Norwegian economy negatively.

Overall, total taxation is to remain unchanged from 2004 levels because of the government’s pledge to do so.

However, it does hope to impose some changes on corporate taxation in the future. The VAT on food is also likely to rise by 1% from 14-15%.

Vinmonopolet’s (government alcohol shops) tax exemption and the wind an spirit monopoly tax will be abolished.

Motoring on

On the motoring front, all fuels are to be covered by road use tax depending on energy content by 2020. The current road tax policy is to be evaluated in 2015.

The government also plans to create an incentive for people to purchase vehicles with lower CO2 emissions by changing this accordingly in vehicle registration tax. Vehicle re-registration tax will be lowered.

A special NOx tax will also be introduced, and existing travel allowance limits for the low per kilometre rate are to be increased from 35,000 to 50,000km.

Home is where the tax is

In other personal economy news, basic allowances on wages will be increased from 36-38%, and abolishing the special rule taxing income from renting out semi-detached housing.

It seems calls by Confederation of Trade Unions (LO) leader to abolish wealth tax have gone unheeded. Whilst the tax-free allowance is to be increased to NOK 750,000, appraisal values of homes abroad will rise by 10%.

Meanwhile, economists are divided in their opinions of today’s budget. Some, like Nordea Market’s Chief Analyst Erik Bruce, believes the government acted wisely.

“We think it’s a sensible budget,” he told NRK, “there is no real need to stimulate more. The Krone would have become too strong for the export industry if Minister Johnsen used more money.”

Whilst Handelsbanken’s Chief Economist Knut Anton Mork, thinks the opposite, believing that the Euro crisis has not been taken into account.

“It’s a little strange that the government keep this ideal of a tight budget, when the European economy is so weak and we have so much money in the bank. The consequences of the debt crisis will also affect Norway. It almost looks like the government has forgotten it.”

For a full overview of taxes and expected revenues, click here (external site).


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Published on Thursday, 6th October, 2011 at 10:00 under the news category, by Michael Sandelson and Lyndsey Smith      .
Last updated on 6th October 2011 at 18:10.

This post has the following tags: norwaystatebudget2012, sigbjoernjohnsen, norwegianministeroffinance.





  
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