OSLO: Norway should reduce taxes, deregulate private enterprise and speed up public sector reforms to boost its competitiveness following a sharp fall in the price of crude oil, its top export, the OECD said in a report on Monday. The end of a more than decade-long energy boom that lifted the country’s per-capita output to the second-highest level in the OECD behind only Luxembourg, left Norway vulnerable, it said.
The price of North Sea oil, which still accounts for about 20 percent of exports, is down by 70 percent since March 2014 when the Organisation for Economic Co-operation and Development (OECD) last published a full report on the Scandinavian country. Norway’s public spending was inefficient, it said, arguing bureaucracy should be cut, agricultural subsidies reduced and more services shifted to the private sector, and that the savings could go towards lower taxes.
Recommendations ranged from boosting the quality and efficiency of education to bringing down the number of people on disability benefits and to merge small municipalities for economies of scale. “Norway’s overall tax structure should be better tuned to encouraging business enterprise and productivity growth by a shift away from income taxation and towards indirect taxation,” the report said. “Some sectors, notably agriculture, need to be less sheltered from international competition,” it argued, and the opening hours of shops should be further liberalised.
