One of the important ways Norfund’s portfolio companies contribute to sustainable development is by paying taxes and fees to the countries in which they operate.
Taxes paid in 2024
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 mobilization, where taxation plays a fundamental role, is one of the most important ways to facilitate sustainable development. Tax revenues provide governments with essential resources that can be spent on infrastructure and public services, such as health services, education and protection for its citizens. Norfund’s investments contribute both directly and indirectly to achieving SDG Target 17.1
Results in 2024
Profitable companies pay taxes to governments in the countries in which they operate. Taxes and fees are paid both by Norfund’s portfolio companies and by the companies in their value chains. This means that company growth can increase the demand for supplies, which in turn can increase tax revenues generated by the suppliers. In this way the company growth contributes to tax generation beyond the tax collected in the company.
In 2024, an amount equivalent to NOK 41.2 billion was paid in taxes and fees by the companies in which Norfund is invested, both directly and through funds. This corresponds to 74 % of the total Norwegian development aid in 2024.
46 % of the total taxes were paid as corporate income tax and 54 % were paid as other transfers, such as sales taxes, withholding taxes, net VAT, royalties, license fees and social security payments.
From the end of 2023 to the end of 2024, the total taxes and fees paid by companies with two consecutive years of reporting increased by NOK 5.4 billion.
Tax revenues per region
About 73 % of the taxes and fees paid by Norfund portfolio companies were paid by companies operating in Africa.
Norfund’s tax policy
A responsible tax policy is fundamental to all 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. The policy 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 includes requirements regarding transparency, stating that Norfund’s investees shall pay taxes to the countries in which they operate and where the income occurs, and that use of third countries must only be done when necessary to meet the fund’s development priority of investing in high-risk markets and to protect the fund’s capital.
Norfund regularly reviews its policies and suggests updates and operational adjustments to ensure compliance. Norfund aims to review its tax policy in 2025 to see if any updates or operational adjustments are needed.