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Considering the consequences of tax changes

Lufttransport is responsible for the SAR-service (search and rescue) in Svalbard on behalf of the Govenor of Svalbard, Odd Olsen Ingerø and Anders Anundsen, minister of Justice. FOTO: Eirik Palm

Considering the consequences of tax changes

The goal was less commuting, but the consequence of the parliamentary decision in 2010 could be trouble with recruiting.

The Minister of Finance is now considering a letter where Lufttransport AS and LT Tech AS are warning about a loss of expertise due to changes in tax regulations for Svalbard at the beginning of next year. 

'Risk scenario'

"As of today, the situation for us is calm," said Hans-Arne Jensen, regional director for Lufttransport. "We have pointed this out as a possible risk scenario for the loss of competence and the challenges of replacing lost competence."

Lufttransport and LT Tech have a contract with The Governor of Svalbard and the Ministry of Justice and Public Safety for the search and rescue helicopters in Svalbard. When Svalbardposten went to press Wednesday, the companies had not received any formal response to the letter sent in mid-August.

In it, corporate management stated in clear terms it could lose competent personnel and that it may also be difficult to recruit new staff. The reason is that from the beginning of the year is no longer possible to commute between Svalbard and mainland fortnightly while retaining Svalbard's tax rate eligibility.
When the decision to discontinue the commuter arrangement was passed by Parliament in 2010, there was a phase-in provision added to allow businesses and residents to prepare. State Secretary Jørgen Næsje (Progress Party) points out the commuting practice has been in violation of Svalbard Taxation Act, which requires one to spend a minimum of 30 consecutive days in Svalbard to be eligible for the archipelago's tax rate.

"The government is committed to ensuring a strong Norwegian presence and a good framework for industry in Svalbard," he wrote in an e-mail. "We are now considering the letter we received from Lufttransport AS and the company will receive a reply shortly."

Through the communications department, he explained further that it would be considered unfortunate if Longyearbyen developed into a commuter community, since all the time the goal has been a robust family community with residents who have strong local ties.
Nevertheless, there are some private persons who are considering if they will stay in Svalbard as a result of the retrenchment. Svalbardposten has spoken to several large employers other than Lufttransport, all of whom are expecting there will be dropouts.

Political case?
Christin Kristoffersen (Labor Party), who was not even Longyearbyen's mayor when the case was submitted for consultation ahead of the parliamentary process, also referred to the amendment's goal of preventing too much oscillation.

Local politicians need to follow up on effects that are not intended or that have consequences other than those desired, she said. Kristoffersen said she has also heard of people who are weighing their options.

"Some people think the consequence will be that more people choose to move here," she said. "That would be right nice and it is the hope that it will be motivating for people, but if not we must do something about it."

In what way?

"Then we need to make a political issue out of it and take it up with the central office," she said. "And so we must be extremely good at showing the consequences."


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