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POLITICS

EXPLAINED: Where does Norway sit politically?

Whether you loathe them or loathe them, politics affect everyday life in one way or another. Here's what you need to know about Norway's political leaning.

Published: 28 September 2022 16:41 CEST
Updated: 19 January 2023 15:45 CET
Pictured is Norway's parliament
The Local spoke to a politics professor on the political leaning of Norway. The Norwegian Parliament is pictured in Downton Oslo, Norway. Photo by Kyree Lien /AFP.

Getting to grips with a new political system and trying to find where your country lies and how that can affect you can be confusing initially So, where does the country lie politically?

Professor Knut Heidar, Professor Emeritus at the Department of Political Science at the University of Oslo, said that Norway could be placed moderately to the left of the political spectrum when compared to the rest of northern Europe. 

“(There is a) broad agreement among the parties about redistribution (of wealth) and an active welfare state. Also, the far-right Progress Party argues for broader state welfare provisions for ‘ordinary people. At the same time, (there is) a broad consensus on providing good opportunities for private enterprise, although (there are) disagreements (between the parties) on taxes,” he explained to The Local. He added that Norway’s political leaning as a country was typical of Scandinavia as a whole. 

Historically, the Labour Party has been Norway’s biggest and most popular political party, with the Conservatives, the country’s largest right-wing party, winning the 2nd or 3rd most seats in parliamentary elections. 

However, Norway is not too far removed from eight years of centre-right government, which included the Progress Party (FRP) for over six of those years. 

The presence of the far-right party in governemnt has had the effect of normalising the populist party as one which could be seen as being part of government- not just in opposition, according to Heidar. 

When asked what impact the Progress Party had while in government, Heidar said: “(It was) small in the overall picture, but they won some symbolic victories. More importantly, (they) moved public debate onto issues that previously had been ‘no-go’ areas.” 

Eventually, though, governmental fatigue would set in for both the Progress Party and Conservative Party and their popularity dipped by the time the 2021 election rolled around. The Conservatives and Progress Party ended up being the two biggest losers on election night, losing nine and six seats respectively. 

The Progress Party would leave governemnt more than a year before the election though. It walked out of government over Norway’s decision to allow a woman linked with the Islamic State terror group back into the country on humanitarian grounds.

What draws voters in Norway to the right? 

Heidar explained that voters of the Conservative Party are typically drawn to its policies on tax and competition between the public and private sector for public services such as health, social services and education.

The political scientist explained that voters of the Progress Party are most concerned with immigration, slashing government red tape, and cutting taxes. 

In this regard, Heidar explained, the Progress Party is similar to other right-wing parties in Scandinavia but that it was less extreme than populist parties in Denmark and Sweden. He added that there was one aspect in which the Progress Party outperformed other parties on the far-right. 

“(They are) also much better in building party organisation and educating their politicians, some of which were much more liberal (in a European sense) than populist,” he said. 

What about the long-term?

The shift from a centre-right to a centre-left government is unlikely to represent a shift in the paradigm or indicate a longer-term trend towards the left. 

Instead, it may simply represent a continuation of the politics and policies that have come before, according to Heidar. 

“No”, the professor said when asked if there was any evidence that Norway could shift further to the right or the left in the longer term. He added that due to serious challenges internationally, the country would likely favour stability over sweeping changes. 

READ ALSO: Why isn’t Norway an EU member?

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TAXES

Who will be affected by Norway’s new exit tax and how will it work?

Norway's government is moving forward with plans to enact stricter tax regulations for people leaving the country. The Local contacted the Ministry of Finance to find out the details.

Published: 25 March 2024 11:45 CET
Who will be affected by Norway's new exit tax and how will it work?

A new exit tax is in the works, the Norwegian government announced recently. 

READ MORE: What we know so far about Norway’s plans for an exit tax

The proposed changes aim to close loopholes within the existing tax system, particularly concerning the taxation of gains made on shares while residing in Norway and moving assets abroad.

Under the proposed regulations, those who have left Norway after March 20th, 2024, would be subject to taxes on gains of more than 500,000 kroner that they have accrued while in Norway. 

This move comes as part of the government’s efforts to address a recent outflow of wealth from the country, with Switzerland being a popular destination for tax exiles from Norway.

READ MORE: Why Norway has continued to see an exodus of wealthy residents

Who would be affected – and how would it work?

The new tax would affect both foreigners and locals – as long as they’re tax resident in the country, State Secretary Erlend Grimstad at the Ministry of Finance told The Local.

“The Norwegian exit tax rules, both the current ones and the ones being proposed, would affect natural persons who are tax residents in Norway,” he said.

The tax settlement process upon departure from Norway would require people to address their tax obligations related to gains exceeding 500,000 kroner on shares acquired during their time in Norway.

Emigrants would have several options for fulfilling this tax obligation, including immediate payment, interest-free instalments spread over 12 years, or deferred payment with accrued interest.

“Exit tax on shares will be imposed on individuals who terminate their tax residence in Norway, either according to Norwegian tax law or the applicable tax treaty.

“The rules also apply when an owner resident in Norway transfers shares as a gift to a person resident outside Norway,” Grimstad said, further noting that the new rules would only apply if the deemed net gain at the time of departure or transfer exceeded 500,000 kroner.

When could the new rules enter into force?

The consultation period for the new exit tax proposal began on March 20th and will last until May 21st, 2024. Thus, stakeholders and the public will have the opportunity to provide feedback and insights for the next two months.

Following this period, the proposal will undergo review and potential adoption by the Norwegian parliament (Storting), with the government needing majority support for implementation.

READ MORE: Does Norway really have some of the highest taxes in the world?

However, if the rules are passed, they will apply from March 20th, 2024, Grimstad told The Local.

“This is necessary to counteract tax adaptations in the time between publication of the proposal and adoption of the changes in the Storting,” he said.

The reasoning behind the new exit tax

Commenting on the exit tax developments last week, Norwegian Finance Minister Trygve Slagsvold Vedum said that it was important to uphold the principle of fairness in the taxation process, noting that people should contribute taxes on assets accumulated in Norway.

However, the proposed regulations also include provisions for those intending to return to Norway within the 12-year timeframe, ensuring that their tax liability would be adjusted accordingly.

“When you relocate, it’s only fair that you contribute taxes on what you’ve earned or gained in Norway. However, this process must be reasonable, hence the 12-year rule. Some people may wish to reside abroad temporarily and eventually return home,” Vedum said at the time, according to the Norwegian Broadcasting Corporation (NRK).

The proposed exit tax would extend beyond shares to include gains from share savings accounts and fund accounts. Additionally, transfers of shares with subsequent gains to people residing abroad, such as relatives, would trigger the tax if gains exceed 100,000 kroner, a reduction from the previous threshold of 500,000 kroner.

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