The move comes as part of the national budget for 2015 to be announced on Wednesday at Parliament in Oslo.
The VAT limit is the maximum amount of money someone can buy something from abroad before it is eligible for VAT.
The VAT limit was introduced in 1975 and has since then been stable on 200 kroner ($30). The limit is especially applicaable for internet shoppers buying from abroad. This year, Norwegians shopping online from overseas will account for 10 billion kroner ($1.5 billion), according to estimates from TV2.
Had the VAT limit from 1975 been index regulated, it would be today on 1,000 kroner ($155), and not the proposed 500 kroner ($77.50).
Harald J. Andersen, director of Virke, reacted to news of the proposed VAT limit hike with shock. He believes the VAT limit increase will give overseas businesses a competitive advantage.
Andersen said: “What the government suggests here is to put down Norwegian businesses. This will mean the closure of many stores.”
“Virke has worked to remove the VAT exemption for a long time. We have shown time after time that this represents a loss of several thousands of jobs,” he added.
Andersen gets support from Geir Pollestad, Centre Party MP and leader of the business committee in the Norwegian Parliament. He advised the committee are trying to stop the move to increase the VAT limit.
Pollestad said: “If the information on an increased VAT exemption for goods bought from abroad is correct, then it's a catastrophe. That means a massive state subsidiary of border commerce on the internet. Norwegian shops and internet stores deserve to be allowed to compete on equal terms. The suggestion from the government must therefore be stopped in Parliament.”