Norfund portfolio companies contribute to sustainable development by paying taxes and fees to the countries in which they operate.
Taxes paid in 2020
Total taxes paid by portfolio companies
Total taxes paid in Africa
Increase in total taxes paid by portfolio companies*
*In companies with two consecutive years of reporting
Domestic resource mobilisation is one of the most important ways to facilitate sustainable development. A tax base provides governments with essential resources to spend on infrastructure and public services, such as health, education and social protection.
Norfund’s investments contribute both directly and indirectly to achieving SDG Target 17.1
Profitable businesses pay taxes to governments in the countries in which they operate. Taxes and fees are paid by Norfund’s portfolio companies and by companies in their value chains.
In 2020, an amount equivalent to NOK 16.9 billion had been paid in taxes and fees by the companies in which Norfund is invested, both directly and through funds. This corresponds to 43 per cent of the total Norwegian development aid in 2020.
paid in taxes and fees by portfolio companies
This corresponds to 43% of the total Norwegian development aid in 2020.
40 per cent was paid as corporate income tax and 60 per cent was paid as other transfers, such as sales taxes, withholding taxes, net VAT, royalties, license fees and social security payments.
From the end of 2019 to the end of 2020, the total taxes and fees paid by companies with two consecutive years of reporting increased by NOK 1.2 billion, or 10 per cent.
Taxes and fees in LDCs
Around NOK 5.5 billion were paid in taxes and fees by companies operating in Least Developed Countries (LDCs).
Tax revenues per region
About 70 per cent of the taxes and fees paid by Norfund portfolio companies were paid by companies operating in Africa. Kenya, Tanzania and Uganda alone accounted for 21 per cent of the total portfolio.
Norfund’s tax policy
A responsible tax policy is fundamental to Norfund’s operations. Our tax policy is based on the principles of the Norfund Act of 1997, Norfund’s statutes and EDFI’s principles for responsible tax in developing countries. It sets out the principles that guide our approach to tax-related issues and what we expect from our portfolio companies and co-investors.
The tax policy include requirements regarding transparency, that Norfund’s investees shall pay taxes to the countries in which they operate and where the income occurs, and that third countries must only be used when necessary to meet the fund’s development priority of investing in high risk markets and to protect the fund’s capital.
In 2020 Norfund’s investments in funds increased, and hence so did the use of third countries. Norfund is actively tracking and monitoring the use of third countries.