Merry Taxmas

The lights went up this week in Reykjavík. This holiday season is nigh… and the darkness is here. For the next three months green energy will illuminate tired trees, sea-bitten windows and what is left of our optimism. Being my fourth Christmas here, these lights now symbolise something else entirely. They are the silent warning that the biggest annual greed swindle is about to kick off. It’s taxing time.
These lights cast an acidic glow onto a group of counteractive regulations at the offices of Tollstjóri, the Directorate of Customs. Among other things, they collect your VAT, taxes on property, national and municipal income, and automobiles and roads.
In the “among other things” bracket is the perplexing tax on posted gifts and personal items, product samples, and the tax on shipping costs. And let’s not forget the charge for customs to open our parcels to see what’s inside. Or the extra 10% VAT that is charged on top of those charges.
Example: Let’s say you order an umbrella online from France because you can’t get the one you want here. The umbrella costs 20€, and shipping is 8€. So that’s a cost of 28€.
Now add import tax. Today 28€ is 5,153.43 ISK. Multiply this by 24.5% and you get 6416.02 ISK. Add another 10% VAT and you have 7057.62. Grand total so far: 38.35 €. That’s right. Almost double the cost of the umbrella. And finally, for the privilege of receiving this parcel and bill, you will be charged by Iceland Post an additional 450 ISK. If you are importing things you intend to sell, no matter how small the quantities, there are further mind-boggling regulations and charges that I won’t go into here.
Now let’s suppose the doe-eyed customs agent handling your package fails to locate the invoice clearly displayed on the outside of the box. Your parcel will arrive a minimum three days later, complete with a request for proof of purchase or ironclad evidence that it is a gift (because even gifts are taxed if they are valued at over 2000 ISK… 10€).
Let me be clear. I have no gripe with protectionism. Local industry in a country as small as this should be protected. But here where not much is being produced, and you can’t really get anything you need… why tax me on a replacement piece for my phone? Why is there high tax on items you cannot buy here? When individuals and small business owners are charged disproportionate fees to import something that is otherwise unavailable here, the only logical outcome is circumvention of the law. Which makes outlaws of the wrong people. Make no mistake about it. The import duties here are unfair and outrageous. All you are protecting is the monopolies.
“Any information, how little as it might seem, can be valuable to the customs office in the fight against illegal import. If you have any information about smuggling please call us at (354) 5528030 or send us an email at smygl@tollur.is”
How does “no” sound?
When I was a kid my family was involved with a charity that would hide religious articles in the lining of coats before sending them to Jews in communist Russia. Living here putsme, and you, on the other side of that curtain. The incompetent Stasi vultures that sift and pick through each and every package, delaying and damaging goods and invading people’s personal and business life, and who then having the gall to charge us for it… it’s a blatant infringement of human rights.
I complain every time I am charged. Frustrated and furious, I asked the Tollstjóri agents how often they received complaint calls like mine. “All the time actually. But we can’t do anything about it.” Finally, I lodged a formal complaint and was put through to one Svanhvít Reith, Tollstjóri’s lawyer. While sympathetic, she claimed she was powerless to act.
“It is like this in every country,” she explained. Vinir, Íslendingar, landsmenn, … it is not. No other country in the world will do this to you. Australia, for example, has 10% import  duty tax, but in twenty years of living there I paid tax only once on the import of a personal item. For years I have been exporting products on a weekly basis and again, no complaints or charges in any country but Iceland.
Icelanders are being heavily taxed for something that is necessary for survival. The powers that be are kicking you when you’re struggling to get back on your feet. It’s unclear who is being protected with this tax on umbrellas and birthday presents. Over the course of the many arguments I have had with Tollstjóri, the majority of customs agents admit outright how destructive and absurd these “laws” are. But they still charge me anyway. Post office attendants apologise to me in embarrassment of this setup, advising me to boycott the tax by refusing to buy things from overseas, drink alcohol or buy petrol. Perhaps they are right.
So this month, when the gifts start trickling in from abroad, and you meander down to the post office to pay tax on them… go and do something else too. Go call Svanhvít. Stand in front of parliament.
And bring your pots and pans.
Originally published in our Xmas Pullout in Dec 2009 (Issue 18).