Record number of rich people left Norway after tax increase

After the Norwegian government raised the wealth tax to 1.1%, a record number of super-rich citizens left the country, and the state treasury missed tens of millions of kronor in tax revenues, The Guardian reports.

Calculations show that in 2022 more than 30 billionaires and multimillionaires left the country. This is more than the total number of the super-rich who left Norway in the previous 13 years. This year, according to forecasts, the exodus will be even more numerous. The increase in the wealth tax, adopted by local authorities in November 2022, led to such results.

Many of these people have moved to Switzerland, where taxes are much lower. Among them is the owner of a multibillion-dollar fishing business, Kjell Inge Rekke, the fourth in the list of the richest Norwegians, whose fortune is estimated at NOK 19.6 billion (US$ 1.8 billion). He moved to the canton of Lugano, near Lake Como and Milan, writing in an open letter: "I chose Lugano as my new residence – it is not the cheapest place and not with the lowest taxes – but, in turn, a great place with a central location in Europe ... For those who are close to the company and to me, I am just a few steps away." Calculations show that since 2008, Rekke has paid taxes in the amount of about 1.5 billion Norwegian kroner. In 2022, he became an individual who was subject to the highest taxes in Norway, and his departure will cost the country 175 million Norwegian kroner per year.

The total wealth of those who left the country was at least 600 billion Norwegian kroner, experts estimated. According to them, it has become something like Brexit for the country: such a flow of entrepreneurs leaving abroad has not been seen in Norway before. An investor in the field of real estate and salmon farming, Tord Ueland Kolstad, whose fortune is estimated at about 1.5 billion Norwegian kroner, also moved to Lucerne. "It is unjustified to impose such costs on a company when you want to create new jobs," he says of the increased tax. According to Kolstad, on his first visit to Switzerland, he felt lonely, "but now there are already several of us [Norwegians] there, so we meet from time to time for a cup of coffee."

State Secretary of the Ministry of Finance Erlend Grimstad expressed hope that sooner or later his rich compatriots will return home. "If you have achieved success and become rich in Norway, we hope that you will stay and continue to participate in the life of Norwegian society. We really encourage Norwegians to succeed in creating values and become rich. And we believe that the Norwegian model, which is distinguished by a strong public welfare system and a high level of education, are important factors that make this success possible. The Norwegian model stipulates that everyone should contribute according to their abilities, and those with more opportunities should pay slightly higher taxes."