From Iceland — Columbia Economics Professor Questions Reduction Of Fishing Fees

Columbia Economics Professor Questions Reduction Of Fishing Fees

Published June 16, 2013

Jón Steinsson, an associate professor of economics at New York’s Columbia University, has criticized the Progressive Party-led government’s decision to reduce the fishing fee, the levy charged to quota owners for their right to fish, as outlined in the new fisheries bill.
The Minister of Fisheries and Agriculture, Sigurður Ingi Jóhannsson, has argued that the levies imposed on the quota owners – some of the wealthiest people in Iceland – have done significant damage to the fisheries, causing the state to lose revenue. By lowering the fees charged to quota owners Sigurður Ingi says that the fisheries can rebuild and create greater value, RÚV reports.
Jón disagrees and sees no economic case for the bill put forward by Sigurður Ingi.
“If the goal is to increase economic growth, it would be much better to reduce income tax or VAT rather than lowering the fishing fees,” he said. “In fact, they should go even further and increase the catch fee so that they could lower taxes even more. That would boost economic growth in the country.”
Fisheries were large financial contributors to the campaigns of Independence Party candidates, the party in a coalition government with the Progressives, donating more than 1.4 million ISK to Illugi Gunarsson alone. Illugi is the newly appointed Minster of Education, Science, and Culture. While the Icelandic National Audit Office has yet to release the 2013 campaign spending records of the Progressive Party, 2009 records show that several fisheries had made significant financial contributions to the party.

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