From Iceland — Finance Minister Defends Raising Food Tax

Finance Minister Defends Raising Food Tax

Published October 16, 2014

Andie Sophia Fontaine
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Minister of Finance Bjarni Benediktsson says it is “out of the question” that there will be any changes to his controversial food tax bill.

RÚV reports that Bjarni dismissed any criticism of his new food bill, saying that the Ministry was not trying to set any consumption criteria for Icelandic households – rather, they were just trying to establish what percentage of household income goes towards food.

“Of course, people also buy food in cafés and restaurants and such,” he said. “We took that into consideration. … It is out of the question to withdraw a bill I have already submitted, as I believe it serves the interests of Icelandic households and will be good for the treasury.”

As reported, according to the Minister’s findings, a family of four (consisting of a married couple and two children, with one under the age of seven) spends an average of 2,980 ISK per day on food. By extension, each Icelander can have three meals per day for only 745 ISK per day, or 248 ISK per meal.

Bryndís Loftsdóttir, an alternate MP for the Independence Party, is amongst those unhappy with the proposed changes to the VAT. As a mother with three children and a husband of her own, she believes the bill is based on unrealistic figures, telling reporters that her family spends about 2 million ISK on food per year – not the 988,000 ISK the bill presumes.

RÚV pointed out that meals in primary schools cost parents about 330 ISK per meal alone. At the same time, Jóhannes Gunnarsson, the director of the Consumers’ Association of Iceland, told DV he does not believe the Minister’s figures are in touch with reality.

“These figures don’t add up in my mind, and I believe they are seriously underestimated,” he said. “I think that anyone who buys food for their households can see that these numbers just don’t work. I would very much like to see the menu behind these figures.”

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