Norwegian tax plan could adversely affect developmentNews // June 6, 2013
The Norwegian Government has introduced a proposal to reduce the tax deduction called 'uplift' in its petroleum tax system from 7.5 per cent to 5.5 per cent.
As broker Seabrokers reports, the overall uplift will therefore be reduced from 30 per cent to 22 per cent. The government has suggested that this proposal will lead to more efficient use of resources, and over time will increase tax revenues. Furthermore, the Government has also proposed increasing its special petroleum tax from 50 to 51 per cent.
However, Statoil has warned that this proposed change to tax breaks for investors on the Norwegian Continental Shelf (NCS) could threaten the attractiveness of future projects.
Statoil has suggested that the uplift change would reduce tax deductions on NCS projects by US$38 million for every US$1 billion invested, and could therefore threaten the economical viability of some development plans.