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Increasing VAT limit for online shopping could lead to the loss of 10,000 jobs by 2020

Øystein Landgraff, Lasse Ruud-Hansen and Ola Them-Enger Anfinset 

Dagens Næringsliv    

3 November 2014 

To read the Norwegian article in full, click here.


PA strategy experts, Øystein Landgraff, Lasse Ruud-Hansen and Ola Them-Enger Anfinset, have had a byline article published in Dagens Næringsliv which discusses the implications of the Norwegian government increasing the VAT limit for buying goods from online stores outside of the country.

The article highlights how, many have questioned the government's claim that this change would provide 180million NOK lost revenue to the public treasury, and have asked to see a report where the implications for businesses and jobs are detailed.

However, there are already clear trends that show the government and the Ministry of Finance are wrong when they claim this change won’t make a ‘big difference’: “Our analysis shows the proposal is devastating for a variety of industries and would mean targeted closure of around 10,000 Norwegian jobs by 2020.”

The authors state that serious consequences are emphasised by relocation plans being considered from companies such as Stormberg and, and how swiftly a number of trading companies have established significant side activity to assess impacts and possible adaptations.

Such a development also affects the supply chain, which means Norwegian equipment and service providers, carriers and advertisement agencies will be given a tough time. Furthermore, investments in new construction will be reduced – exemplified by the announcement of Komplett Group about the postponement of new warehouses being built.

Øystein, Lasse and Ola go on to say: “The demand shift towards foreign online stores will particularly affect physical stores that are balancing between the black and the red, and cannot withstand further loss. In the retail sector we expect direct sales falling by almost 11 billion NOK. Overall, we estimate that 9,600 jobs will disappear.”

The authors conclude: “A good government policy would create predictability, fair competition and lower prices through dismantling tariff barriers to stimulate growth, innovation and diversity in the Norwegian economy. However, a bad policy will punish random trades by sponsoring foreign competitors. We hope that the Norwegian government reconsiders their plan.”

PA Consulting Group in Norway

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