Conservative Chairman Criticises Proposed Tax Increase

Published August 10, 2012

Conservative chairman Bjarni Benediktsson has called a government-proposed increase on the VAT on accommodation costs “utterly ridiculous”.
The ruling coalition, in their continued work at recovering the economy, have looked for where cuts can be made and increases levied. One area involves tourism – the government is proposing increasing the VAT on accommodation costs from 7% to 25.5%. As tourism is a growing industry, the government believes more than tripling the VAT within the field could bring in much-needed revenue for the economy.
Vísir reports that conservative chairman Bjarni Benediktsson strongly disagrees, calling the proposal “utterly ridiculous”.
He considers the tax hike unrealistic, and does not believe it would bring any significant returns to the treasury coffers. Bjarni also pointed out that as a growing industry and area of employment, it has been hoped that investors would be drawn to Iceland. “The last thing [tourism] needs are tax hikes which undermines the industry as a whole during a period of growth.”



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