1 Main features of the tax policy

1.1 The Norwegian government’s tax policy

The Norwegian government is working towards a sustainable welfare society by restructuring the Norwegian economy and facilitating economic growth and the Green Shift, job creation and greater social mobility. The tax policy will contribute to attainment of these goals.

The government will utilise the tax system to finance public goods, bring about more efficient resource utilisation and provide better conditions for Norwegian business and industry, while at the same time contributing to redistribution. Norwegian private ownership will be strengthened, and it will pay to work, save and invest. Taxes will also be used to stimulate more environmentally friendly behaviour. Improvements to the tax system are therefore a key aspect of the government’s economic policy and an important instrument in the promotion of economic growth.

Overall, the government has cut taxes by around NOK 37 billion accrued, at 2021 prices, since the government took office. In addition, temporary tax cuts for the petroleum sector, which are estimated to have a present value of NOK 10 billion, were introduced in spring 2020.

The changes introduced by the government up to and including 2021 comprise:

• Income tax has been reduced for both individuals and companies. The reduction in the tax rate applied to general income for individuals and companies from 28 to 22 per cent is helping to stimulate both saving and investment. The reduction in marginal tax rates for individuals and the abolition of tax class 2 have strengthened employment incentives.

• Tax on commercial activity, including corporate tax, has been cut by around NOK 6 billion net.

• Net wealth tax has been cut by approximately NOK 10 billion. These reductions are helping to stimulate saving, improve the availability of Norwegian equity and boost investments in commercial activity. The tax rate has been cut, the tax-free allowance has been raised, and a separate valuation discount has been introduced for shares, fixed assets and assigned debt. The valuation of assets has become more consistent.

• There has been a marked shift towards environmentally oriented taxes. The general level of taxation through the CO₂ Tax on Mineral Products has been increased, while a number of exemptions and reduced rates have been abolished.

• Inheritance Tax has been abolished. This will ease the liquidity burden associated with generational shift and represents a major simplification in the tax system.

• A raft of changes have been introduced in order to encourage entrepreneurship. For example, a tax scheme has been introduced concerning options in small start-up companies, along with a tax incentive scheme for investments in such enterprises.

• The Young people’s housing savings scheme (BSU) has been improved by raising the upper limits and targeting the scheme at those who do not already own a home.

• The TV Licence has been abolished and replaced by ordinary tax funding.

• The rules concerning benefits in kind and employment-related gifts have been improved and made more flexible.

• Simpler rules have been introduced for foreign workers on short-term stays in Norway, by taxing earned income according to a gross method at a flat rate of 25 per cent.

• The R&D tax credit scheme (Skattefunn), which stimulates research and innovation within the business sector, has been expanded.

• Resource rent tax for hydropower has been changed into a cash flow tax.

• An obligation has been introduced to provide the tax authorities with information from digital platforms concerning rentals and services provided via such platforms, in order to contribute to correct taxation.

• A withholding tax has been introduced on interest and royalties of 15 per cent in order to counter the transfer of profits to low-tax countries.

• Regarding motor vehicle taxes, the One-off Registration Tax on Vehicles has been revised to make it more environmentally friendly, and the substantial tax benefits for electric cars have been continued. This has helped to increase the proportion of zero- and low-emission cars in the new car fleet and reduced revenues for central government. The government has presented principles for sustainable car taxes and begun the follow-up process by proposing a number of measures which will slow the decline in tax revenues.

• Re-registration Tax has been reduced and simplified.

• Overpriced fees have been cut by just under NOK 1 billion.

• The general tax avoidance rule has been reviewed and legislated.

1.2 Main features of the government’s tax programme for 2022

The 2022 budget builds on the strategy adopted for the roadmap out of the COVID-19 crisis. The government will facilitate more profitable jobs in the private sector, build expertise and promote inclusion. The white paper on long-term perspectives for the Norwegian economy and the white paper on climate policy describe the challenges that must be faced over the coming years, irrespective of the pandemic and its aftermath. The tax system must be adapted and deliver in the face of demographic changes, financial challenges and, last but not least, the challenges relating to the environment and climate change. At the same time, the distribution profile must also be addressed.

The government’s proposed 2022 National Budget implements the first stage of an increase in taxes on non-ETS emissions of greenhouse gases to around NOK 2,000 per tonne of carbon dioxide in 2030 at 2020 prices. Efforts continue to be made to slow the decline in tax revenues and make motor vehicle taxes more sustainable going forward.

In 2022, the government will prioritise reductions in income tax and wealth tax. Proposals have been put forward for a job allowance for young people, a lower Bracket Tax, an increase in the low rate in Parental Allowance, increased valuation discount of shares and a more favourable option tax scheme for start-up companies. In addition, certain adjustments are proposed to the scheme concerning differentiated employer’s National Insurance contributions (changes in scope).

The tax programme for 2022 will improve framework conditions for employment and value creation, and strengthen incentives for climate-friendly decisions. This is in line with the framework for the government’s tax policy in the Granavolden political platform. Overall, the proposal will see the introduction of new tax cuts totalling NOK 0.2 billion in 2022; see Table 1.1. The tax cuts to be introduced under this government through the proposed National Budget will collectively amount to NOK 38 billion at 2022 prices, once they have been fully implemented.

Higher climate taxes and compensation for households

The government attaches great importance to using taxes in a manner which ensures that climate targets are achieved efficiently. From 2022, the escalation of taxes on non-ETS emissions of greenhouse gases to around NOK 2,000 per tonne of carbon dioxide at 2020 prices in 2030, will start, in line with the white paper on climate policy. Polluters will thus gradually have to pay more for their emissions. This will stimulate climate-friendly investments. The government is proposing that the general level of taxation on non-ETS emissions of greenhouse gases be increased by 28 per cent over and above the price adjusted level in 2022. Higher climate taxes have a broad impact. The additional revenue raised through higher taxes on non-ETS emissions of greenhouse gases will be used for tax cuts. The government is proposing that Electricity Tax be cut by NOK 0.015 per kWh. This will benefit most households.

At the same time, the government is aiming to ensure that tax cuts primarily benefit the groups who are actually affected by the tax rise. The government is proposing that Road Traffic Insurance Tax be cut annually by NOK 95. The cut in Road Traffic Insurance Tax will reduce costs for car owners, yet retain the incentives to reduce the use of fossil fuel cars as a result of the increase in CO₂ Tax. In 2022, commuters will specifically benefit through restructuring of the Travel Allowance. Travel Allowance rates are being increased to a single rate of NOK 1.65 per kilometre. The basic deduction, i.e. the threshold for being eligible for Travel Allowance, is being lowered by about NOK 10,000 for taxpayers who are resident in the approximately 270 least central municipalities according to Statistics Norway’s Centrality Index.

Sustainable motor vehicle taxes

In recent decades, motor vehicle taxes have been used to influence the composition of the vehicle fleet in the direction of low- and zero-emission cars. Zero-emission cars are exempt from VAT, One-off Registration Tax and Re-registration Tax, and are subject to a lower rate of Road Traffic Insurance Tax. The use of zero-emission cars is also not subject to Road Usage Duty. This policy has helped Norway to become a leader on the international stage as regards the proportion of electric cars in the vehicle fleet. During the first eight months of 2021, electric cars accounted for approximately 60 per cent of new car sales.

At the same time, the policy instruments imply that the external costs associated with using low- and zero-emission vehicles, except CO₂ emissions, are either not priced at all or priced in a poorly targeted manner. In the 2022 National Budget, the government is proposing changes that will slow the decline in revenues, while strengthening the incentives to purchase an electric car.

The government’s goal is for only zero-emission cars to be sold from 2025. To achieve this goal, zero-emission cars will also have to replace rechargeable hybrid cars. The government is therefore proposing to reduce the tax benefits that rechargeable hybrid cars offer as regards One-off Registration Tax on Vehicles. The government is furthermore proposing to increase the CO₂ component in the One-off Registration Tax on cars. The introduction of Re-registration Tax and full Road Traffic Insurance Tax for electric cars is also proposed. In addition, a study will be initiated regarding a position-based road usage duty which can price the external costs associated with all vehicles in a better way than the current Road Usage Duty.

Reduced Bracket Tax and a new job allowance for young people

The increase in revenues as a result of changes to motor vehicle taxes will create scope for broad tax cuts in the form of reduced taxes on employment. The government is proposing to reduce the rate in steps 1 and 2 of Bracket Tax by 0.3 and 0.2 percentage points respectively, so that the marginal tax on earned income is reduced for those on low and middle incomes. This represents a continuation of the government’s policy to facilitate a healthy labour market.

The government is also prioritising cuts in income tax, which will help to encourage young people to find employment and contribute to redistribution in the desired direction. The government is proposing the introduction of a job allowance of NOK 23,500 for young people under the age of 30. This proposal must be viewed in the context of other measures implemented by the government to shorten the route for young people into working life. This particularly applies to measures relating to education and competency, including measures to encourage more people to complete upper secondary education and improve mental health, along with targeted measures within the Norwegian Labour and Welfare Administration (NAV) such as the specific youth initiative.

Options in employment

In order to promote restructuring, we must facilitate the start-up and development of new enterprises. The government is proposing a new and improved scheme for taxation on options in employment. This will make it easier for start-up and growth companies to attract and retain expertise, and more people will have the opportunity to become co-owners of their own company. Neither the allocation of the option nor the gain made upon redemption of the share option will trigger a tax liability for employees. The gain will be taxed as share income when the shares are eventually realised. The scheme will be very similar to the current scheme in Sweden.

Wealth Tax

The government is continuing to cut net wealth tax in order to support Norwegian owners in developing new commercial ventures and job creation. In 2022, it is proposed that the capital value of shares and fixed assets be reduced to 50 per cent of the valuation for Wealth Tax. In addition, the tax-free allowance is being increased to NOK 1.6 million. The government is also proposing a number of expansions to the basis for paying Wealth Tax. Valuations of holiday properties, secondary dwellings and high-value residential properties are being increased, and the established practice which results in fisheries and fish farming permits being valued too low will be abolished.

Natural resources

A proposal to change Special Tax levied on the petroleum sector into a neutral cash flow tax was distributed for consultation on 3 September 2021, with a view to being implemented with effect from the 2022 income year. The switch to a cash flow tax, with immediate expensing of investments, will lead to greater consistency between the profitability assessments of companies and society at large, bring about predictability regarding future tax rules and at the same time provide companies with a significant liquidity boost. A tax on onshore wind power is also being introduced at the rate of NOK 0.01 per generated kWh. This tax will take effect from the date determined by the Ministry.

Other proposed tax reforms

The government is also proposing other reforms to the tax rules, including:

• The personal allowance and exemption card limit are being adjusted to take account of wage levels.

• The minimum standard deduction from wages/National Insurance contributions is being increased from 46 to 48 per cent.

• The tax-free minimum Pension Tax level is being adjusted by increasing the minimum standard deduction for pensions from 37 to 40 per cent.

• The maximum rebate for shares at a discount in the employer company is being raised from 25 to 30 per cent.

• The tax rules for housing companies which increase the limit on the number of housing units that can be let under a rent-to-own model are being revised.

• A number of upper limits in the tax system will remain nominally unchanged. This applies for example to the trade union allowance, the high rate for Parental Allowance, the tax-free net income and the wealth supplement in the tax limitation rule, the special allowance applicable in the action zone in Troms and Finnmark, the Fishermen’s Allowance and Seafarers’ Allowance and the maximum savings level in the Young people’s housing savings scheme (BSU).

• Resource rent tax for hydropower is being revised to coordinate it better with corporate tax.

• Air passenger tax is being reintroduced.

• CO₂ Tax levied on natural gas and LPG within the greenhouse industry is being introduced at 20 per cent of the standard tax rate. The aim is to introduce the full tax from 2026.

• The mineral oil rate in Road Usage Duty is being raised, while the corresponding biodiesel rate is being reduced, so that the rates will become equal.

• CO₂ Tax levied on natural gas which is discharged into the atmosphere by the petroleum sector is being increased to the standard tax level applicable to non-ETS emissions of greenhouse gases.

• CO₂ Tax levied on the petroleum sector is being increased by 15 per cent over and above the price adjustment.

• CO₂ Tax on mineral oils for domestic aviation is being raised to the same level as that levied in the petroleum sector.

• Waste Incineration Tax is being introduced at a rate equivalent to 25 per cent of the standard tax level on non-ETS emissions.

• The exemption from VAT for naprapaths and osteopaths is being extended until 1 July 2022.

• Overcharging of fees under the Ministry of Justice and Public Security will be reduced by NOK 101.7 million in 2022.

• The fee payable for the theory test for road passenger vehicles under the Norwegian Public Roads Administration is being cut from NOK 680 to NOK 350.

• The sectoral tax under the Financial Supervisory Authority of Norway is being increased by NOK 21 million.

• The sectoral tax under the Norwegian Metrology Service is being cut by NOK 20 million.

• The sectoral tax under Petroleum Safety Authority Norway is being increased by NOK 17 million.

1.3 Increase in revenues as a result of the proposed tax changes

Table 1.1 presents an overview of the effects of the government’s proposals on revenues. The revenue implications of the tax programme have been calculated in relation to a reference system for 2022. This reference system is based on the 2021 rules adjusted upwards largely by estimated price, wage or wealth growth. In real terms, the reference system thus results in unchanged tax levels from 2021 to 2022.

Allowances and upper limits etc. in the standard rate structure of personal taxation are mainly adjusted to 2022 levels based on estimated wage growth of 3.0 per cent. Special allowances and other limits on personal taxation have primarily been adjusted using an estimated consumer price increase from 2021 to 2022 of 1.3 per cent. A taxpayer who only has ordinary allowances and growth in both general and personal income of 3.0 per cent will on average pay approximately the same amount of income tax in the reference system for 2022 as in 2021. In the reference system, all per unit taxes have been adjusted by the projected rise in consumer prices from 2021 to 2022.

The revenue table presents the revenue implications for the 2022 budget year only. Tax cuts can contribute to better use of resources and strengthen the foundations for economic growth. A proportion of the immediate loss in revenue will then be offset by growth in the bases on which taxes are paid. Tax cuts can therefore be self-financing to some degree. An increase in the tax bases can take place over a period of many years. The associated increase in revenues can therefore not be budgeted for in the budget year. As the tax bases grow and tax revenues rise, the room for manoeuvre in the budgets will increase.

Table 1.2 shows tax revenue estimates for 2022, as well as estimates for 2021 and accounting figures for 2020, divided into chapters and items.

Table 1.3 shows effects arising from the proposed new rule changes in 2022, divided into chapter and item.

1.4 Effects of the tax policy on resource use and distribution

Dynamic effects

Various taxes have different effects on resource use in the economy. Some taxes contribute to the better use of resources. This applies for example to taxes that lead to more correct pricing of health and environmentally harmful activities. Appropriately formulated resource rent taxes on geographically fixed natural resources will appear to be neutral, so that projects that are profitable before resource rent tax will also be profitable after resource rent tax. On the other hand, most taxes lead individuals and businesses to alter the decisions they make in such a way that resources are utilised less efficiently. For example, taxes on employment make it less profitable to work. Similarly, it becomes less profitable to repay debt, put money in the bank or buy shares if a proportion of the return is deducted in the form of tax. Taxes on corporate profits result in fewer investments becoming profitable for the enterprises concerned.

Most tax revenues must come from taxes which, in isolation, have a negative impact on the economy. For a given tax level, the negative effects will be minimised if the greatest emphasis is placed on taxes that have little impact on the decisions of individuals and businesses, and if tax rates are low and imposed on a broad base, rather than high and imposed on a narrow base. High rates of distorting taxes create strong incentives to alter behaviour. This results in resources being used less efficiently and can hinder economic growth. High rates will also make it more profitable to circumvent or evade tax.

Reducing tax rates can therefore contribute to the better use of resources and lay the foundations for further growth. The potential for socio-economic gains from tax cuts will depend on how high the rates are in the first place, and how distorting the individual tax category is as regards resource use. For example, economic research suggests that lower tax rates on corporate profits and employment can have particularly beneficial effects. The 2014 Tax Committee referred to international research and concluded that property taxes and consumption taxes inhibit economic growth less than other types of taxes; cf. NOU 2014: 13 Capital Taxation in an International Economy. The Committee noted that traditional corporate and personal income taxes (taxes on employment and capital income) reduce economic growth more than other taxes.

During the period 2013–2019, the tax rate on general income for companies and individuals was reduced by 6 percentage points, from 28 to 22 per cent. This underpins the potential for growth in the mainland economy by stimulating increases in investments and labour supply over time. In particular, lower rates of corporate tax are believed to have a positive effect. Estimates from the 2014 Tax Committee indicate that the changes made to corporate tax could have a self-financing ratio of 20–40 per cent over time.

The reduction in the tax rate on general income for individuals, combined with a switch from surtax to bracket tax, has reduced the marginal tax rate on both employment and savings. During the period 2013–2021, the total marginal tax rate on employment was reduced by between 1.4 and 3.9 percentage points for those paying bracket tax (those with a personal income of at least NOK 184,800 in 2021). For individuals who pay tax on general income but whose employment income is below the bracket tax threshold, marginal tax was reduced by 4.5 percentage points over the same period. This will stimulate employment and may be self-financing to some extent over time.

The government’s proposed income tax cuts from 2022 will further reduce the marginal tax paid by many people on low and middle incomes. Figure 1.1 shows the reduction in marginal tax on wages from 2013 to 2022, including the government’s proposed relief in bracket tax and the minimum standard deduction for earned income. In addition, the proposed job allowance for young people (17–29 years) will stimulate the transition from social security benefits to employment. Those who are already in employment and have a relatively low employment income will also have a greater incentive to work more, while the marginal tax rate among some groups of young people with somewhat higher employment incomes will increase as a result of the reduction in the allowance.

In isolation, the reduction in the tax rate on general income for individuals has cut the marginal tax on capital income by 6 percentage points. Empirical research suggests that higher returns after tax lead to an overall increase in saving, but it is uncertain how great this effect is.

The reduction in the net wealth tax rate from 1.1 to 0.85 per cent and the reduction in the valuation of shares and fixed assets in net wealth tax will, when combined with the reduction in the tax rate on general income, increase the return after tax from investments in shares and fixed assets for those who are liable to pay net wealth tax. Furthermore, the favouritising in net wealth tax of investments in primary dwellings and holiday homes rather than investment in commercial activity is dampened. On the other hand, the favouritising of shares and fixed assets increases somewhat compared with secondary dwellings, bank deposits and bonds. The reduced valuation may help to channel a higher proportion of savings into investments in commercial activity. It may also help to boost investments in enterprises which are dependent on Norwegian equity in order to carry out their projects. Accordingly, it is believed that a lower net wealth tax will have a positive long-term effect on the Norwegian economy and jobs.

The Ministry believes that it takes time for the dynamic effects of changes in income and wealth tax to impact on tax revenues. For example, it may take time for people to increase their working hours because they often have to increase their full-time equivalent percentage or find a new job. However, it is assumed that changes in taxes will already start to impact on prices and demand during the first year. The revenue estimates for most excise duties therefore take into account the fact that the tax base will change when tax rates are revised.

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¹ The calculation assumes that the wage earner is aged 30 or over and therefore does not qualify for job allowance.

² Upper limits and thresholds are adjusted with wage growth.

Source Ministry of Finance.

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¹ The calculation includes the abolition of the TV licence in 2020. The calculation assumes that the wage earner is aged 30 or over and therefore does not qualify for job allowance.

² Upper limits and thresholds are adjusted with wage growth.

Source Ministry of Finance.

Distributional effects

The tax system contributes directly to redistribution, partly because average tax rises with income. It also contributes indirectly by influencing adjustments by individuals within the labour market and other decisions which impact on their financial situation. When the government’s tax policy makes it more profitable to invest, work and save, it will impact on income distribution over time. The government has emphasised that broad groups of the population should benefit from the tax cuts.

The sum of the cuts in income taxation under this government, including the proposal for 2022, is apparent both in the form of lower marginal taxes on employment (the increase in tax when income increases by one krone), particularly as regards low incomes, and in the form of lower average taxes (tax expressed as a percentage of income). This is illustrated in Figures 1.1 and 1.2. The greatest reduction in the average tax rate under this government concerns low earned incomes. This is because the progressiveness of the rate structure has been increased.

The way in which average tax and marginal tax change when income rises impacts on both employment incentives and redistribution. In some cases, these considerations may need to be balanced. Any redistribution policy must take into account the fact that there may be a significant difference between the distributional effects when tax cuts have an impact on adjustments made by individuals within the labour market and the distributional effects in the budget year. At the same time, distributional effects are calculated on the basis of present day adjustments and the tax basis. The estimates therefore provide information on the effects of the tax changes in the short term, but the effects over an extended period of time are not quantified. There is a risk that the effects that can be easily calculated will receive a disproportionate amount of attention compared with the unquantified, positive effects of a tax policy which increases investment and labour supply.

Over time, a tax policy that strengthens the incentives to work will contribute to a more even distribution if more people enter employment, but it can also contribute to a more uneven distribution if high earners increase their working hours more. The government’s gradual reduction in marginal taxes on employment since 2013 has resulted in lower marginal taxes throughout the income distribution, but mostly at low wage levels. This approach is being continued in the tax proposal for 2022, e.g. through the reduction in Bracket Tax in steps 1 and 2 and the new job allowance for young people under the age of 30.

The analyses reproduced below quantify the short-term distributional effects of the government’s proposed tax changes for 2022.

It is estimated that 84 per cent of taxpayers will pay less tax under the proposal, 15 per cent of taxpayers will pay approximately the same amount of tax and 1 per cent of taxpayers will pay more tax. The largest tax cuts measured as a percentage of income relate to low-income groups; see Table 1.4. This is mainly due to the focus of the reductions in income tax (higher rate for the minimum standard deductions from wages/National Insurance contributions and pensions, the cuts in Bracket Tax level 1, and the introduction of a job allowance for young people). Approximately half of the tax cuts go to individuals with a gross income of less than NOK 500,000. Overall, all taxpayers will pay an average of approximately NOK 1,200 less in tax, of which the reduction in Wealth Tax accounts for NOK 200.

The calculations include all changes in the income and wealth taxation of individuals that can be calculated using Statistics Norway’s LOTTE-Skatt tax model. In total, this represents a net tax cut of approximately NOK 5.2 billion accrued. In the calculations of how the tax scheme affects different population groups, the tax that follows from the government’s proposal is compared with that which follows from the reference system for 2022.

Some of the proposals that concern tax on income for individuals are not included in the distribution calculations. This applies to changes to the Travel Allowance, the introduction of a new option tax scheme for companies in the start-up and growth phase, the increase in the discount rate in tax-free benefits for employees’ purchases of shares in their own company, the introduction of market valuation of fish farming permits in Wealth Tax and the introduction a tax-free allowance in the municipal component of Wealth Tax for individuals who are not resident in Norway. It is estimated that these proposals will result in additional net tax cuts of approximately NOK 0.1 billion accrued. These changes amount to approximately NOK 20 less tax per taxpayer on average, but the changes cannot be distributed according to gross income or socio-economic group. The effects of changes in corporate taxation, indirect taxes, sectoral taxes and overpriced fees are also not included in the distribution calculations.

For the wage earners group, the total reduction is estimated at approximately NOK 3.3 billion. This corresponds to an average tax cut of NOK 1,500, of which approximately NOK 200 comes from the reduction in Wealth Tax.

Among the group whose primary income source is from business activities, the average reduction amounts to approximately NOK 1,500, of which approximately NOK 500 is due to cuts in Wealth Tax. The total reduction in taxes for self-employed amounts to around NOK 150 million.

Pensioners1 collectively receive a tax cut of approximately NOK 600 million. This corresponds to an average tax cut of about NOK 700, of which NOK 200 can be attributed to the reductions in Wealth Tax.

On average, those on social security benefits2 receive a tax cut of approximately NOK 700, mainly as a result of lower income tax. The total tax relief for those receiving social security benefits amounts to approximately NOK 300 million.

1.5 Tax rates and upper limits

Table 1.5 shows tax rates, allowances and upper limits in 2021 and the government’s proposal for 2022. After adjustment to take account of anticipated growth in wages, pensions or prices from 2021 to 2022, the general allowances and upper limits will be rounded off. The upward adjustment may therefore deviate somewhat from the level indicated by the various growth projections. Wage growth is estimated at 3.0 per cent, consumer price inflation at 1.3 per cent and growth in the ordinary old-age pension at 2.2 per cent.

Table 1.6 shows the current rates for VAT and excise duties, as well as the proposed rates for 2022. All excise duties have generally been adjusted upwards by 1.3 per cent to take account of projected inflation. Minor deviations may be due to rounding of the rates.

1.6 Distribution of public tax revenues

Table 1.7 presents a general overview of the main groups of taxes and shows the areas of the general government that receive revenues from each main group. Total tax revenues are estimated at NOK 1,525 billion in 2021. Of this amount, just over 83 per cent will accrue to central government, just under 14 per cent to the municipalities and just under 3 per cent to the county councils.

Most municipal and county council tax revenues originate from income tax and tax on net wealth paid by personal taxpayers. Approximately 34 per cent of central government tax revenues are derived from VAT, excise duty and customs duty. Approximately 31 per cent of central government tax revenues are derived from personal taxpayers, while just under 34 per cent comes from non-personal taxpayers and employer’s National Insurance contributions in Mainland Norway.