COPENHAGEN: Water and supply companies in Denmark will have to pay an unexpected punitive tax that may significantly increase water bills this year, following the introduction of a controversial tax law.
Some households with be affected, and that a family with an annual water consumption of 120 cubic meters may end up paying up to 1,000 kroner more.
Although the country’s more than 300 municipal water and supply companies have complied with the rules, SKAT is asking them to pay more. The root of the trouble lies in the way SKAT and the companies calculated their value.
In 2009, a complex law was passed to ensure water companies would not earn too much money from selling water. The law requires that water and sewage companies are publicly owned, and that they cannot generate profits and therefore cannot be sold.
Arne Kirt Hansen, the CEO of Frederikssund Forsyning, explains that consumers only pay for their operational costs and for the streamlining of the water supply and sewage services.
Hansen said we cannot make a profit, so it’s hard to understand why we are taxed on something we don’t earn. According to SKAT, however, is it about how much the supply companies are worth in terms of market value.
Hansen added it is reasonable we are taxed when we offer extra services, but I would have never dreamt we would get taxed for our primary activity.
