Calls for energy VAT exemption in Norway as state revenues double
State revenues from VAT on energy have doubled compared to last year, leading to calls for the Norwegian government to introduce an exemption in the south of Norway.
The Norwegian state has earned more than 21.5 billion kroner from VAT on electricity this year, according to figures from the Norwegian Tax Administration and reported by public broadcaster NRK.
Revenues from energy VAT are around double what they were at the same time last year when the state had earned 11 billion kroner by September.
Given the high revenues generated from energy VAT, many are calling for an exemption from value-added tax in southern Norway, where prices are highest.
"Since we already have a VAT exemption for electricity in northern Norway, it shouldn't be difficult to implement for all residents," Professor of Finance at NMBU School of Business, Espen Gaarder Haug, told the Norwegian Broadcasting Corporation (NRK).
The Taxpayers Association (Skattebetalerforeningen) also said a VAT exemption would be a fair solution.
"In the north, they have a low price and do not pay VAT, while we in the south have a high price and have to pay VAT in addition. A VAT exemption will make it a little more fair between north and south," Hilde Alvsåker, legal adviser at the Taxpayers Association, said.
However, the revenues from VAT may be paying for the government's energy subsidy scheme, which sees the state pick up 90 percent of energy bills when the price rises above 70 øre kWh.
Norwegian newspaper VG reports that by July 19th, the government had paid out 11 billion kroner in energy support.
State Secretary Erlend Grimstad says the government will spend around 40 billion kroner on energy subsidy schemes this year.
"For private households, the current electricity subsidy scheme means that the state takes 90 per cent of the bill when the price exceeds 70 øre. This also includes VAT. Simply explained, this means that it is the state that takes most of the VAT bill when prices are high today," he told NRK.
Earlier this year, state-owned Statnett announced that it would stop charging households in Norway grid rent due to record revenues.
READ MORE: Could the fireplace be a cheaper heating alternative to high energy prices in Norway?
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The Norwegian state has earned more than 21.5 billion kroner from VAT on electricity this year, according to figures from the Norwegian Tax Administration and reported by public broadcaster NRK.
Revenues from energy VAT are around double what they were at the same time last year when the state had earned 11 billion kroner by September.
Given the high revenues generated from energy VAT, many are calling for an exemption from value-added tax in southern Norway, where prices are highest.
"Since we already have a VAT exemption for electricity in northern Norway, it shouldn't be difficult to implement for all residents," Professor of Finance at NMBU School of Business, Espen Gaarder Haug, told the Norwegian Broadcasting Corporation (NRK).
The Taxpayers Association (Skattebetalerforeningen) also said a VAT exemption would be a fair solution.
"In the north, they have a low price and do not pay VAT, while we in the south have a high price and have to pay VAT in addition. A VAT exemption will make it a little more fair between north and south," Hilde Alvsåker, legal adviser at the Taxpayers Association, said.
However, the revenues from VAT may be paying for the government's energy subsidy scheme, which sees the state pick up 90 percent of energy bills when the price rises above 70 øre kWh.
Norwegian newspaper VG reports that by July 19th, the government had paid out 11 billion kroner in energy support.
State Secretary Erlend Grimstad says the government will spend around 40 billion kroner on energy subsidy schemes this year.
"For private households, the current electricity subsidy scheme means that the state takes 90 per cent of the bill when the price exceeds 70 øre. This also includes VAT. Simply explained, this means that it is the state that takes most of the VAT bill when prices are high today," he told NRK.
Earlier this year, state-owned Statnett announced that it would stop charging households in Norway grid rent due to record revenues.
READ MORE: Could the fireplace be a cheaper heating alternative to high energy prices in Norway?
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