– Exit taxation must not weaken Greenlandic companies

Naalakkersuisut's proposal for Inatsisartut law on the so-called exit taxation risks putting companies established in Greenland at a disadvantage compared to branches of foreign companies and companies that are currently managed from abroad.

This is what Siumut in Inatsisartut believes.

- This raises concerns for us in Siumut in Inatsisartut, writes Erik Jensen, the party's group chairman in a press release.

- As has been reported in the press, the bill in its current form could mean that healthy and well-run businesses must close, for example if the owner wants to retire and no buyer can be found in Greenland.

- We risk punishing businesses that have been built up locally over generations. It cannot be right that Greenlandic businesses are placed at a lower level than foreign players. A healthy and enterprising business community is a fundamental prerequisite for welfare and prosperity in Greenland, says Erik Jensen.

Amendment proposal on the way from Siumut

According to Siumut's group chairman Erik Jensen, it is a political task to ensure a safe and fair framework for local ownership and generational change – not to make it more difficult.

Therefore, he will submit an amendment to the proposed tax law that Inatsisartut will consider at the spring session.

- The proposal will contain some good intentions and has been prepared in collaboration with experts in tax law to ensure that the law continues to fulfill its purpose: to prevent funds from being moved out of the country untaxed. We support a responsible tax policy. But it must be fair, he says.

The proposal will be considered at the upcoming meeting of Inatsisartut's Finance and Tax Committee.

- We must protect our society against tax evasion and at the same time protect our local business community. The amendment aims to ensure that Greenlandic companies have the same opportunities as foreign companies, while maintaining considerations for taxation and the economy, says Erik Jensen.

Resistance from the business community

As Sermitsiaq wrote on January 27, there is widespread resistance from large parts of the Greenland business community to Naalakkersuisut's controversial bill on emigrant taxation.

This was shown by a joint consultation response from 14 companies and organizations as well as a consultation response from the Bank of Greenland to an amendment from the Department of Finance and Taxation.

The consultation responses agreed that the amendment does not come close to solving the problems that the business community has already pointed out.

Kitdlak Knudsen gets into a bind

One of the signatories of the joint consultation response was Kitdlak Knudsen, owner of the electrical company Carl Lynge ApS in Nuuk.

He has told Sermitsiaq that the exit tax may force him to close the business, as there are no buyers for it in Greenland. Kitdlak Knudsen has a potential Danish buyer.

- I have a buyer. He wants me to continue as director, so the changes mean nothing to me. The buyer will either start by firing me now or pay exit tax when I retire one day.

- The buyer is therefore not interested in completing the deal anyway, Kitdlak Knudsen told Sermitsiaq in January.