Wants To Raise Taxes On Tourism

An MP for the Progressive Party wants to raise taxes on hospitality services and reinstate the VAT for businesses in the tourist industry.

Karl Garðarsson, posting on his Facebook, expressed objections to a proposal from the Independence Party to raise taxes on food, while “there is no sign that tourism or associated parties will pay their share.”

As RÚV points out, in the summer of 2013 the ruling coalition reversed a change to tax law made by the previous government, which raised the taxes on hotel stays from 7% to 14%. This decision prompted the idea of imposing entrance fees to tourist sites that used to be free of charge, in order to make up the difference.

Karl now says the time has come to review this decision.

“Many parties connected to tourism pay no VAT,” Karl writes. “This is hardly fair while the price of food for the public is being raised.”

Whether these “tourist tax” proposals will move forward remains to be seen, but Karl is optimistic.

“I think these [proposals] have the support of a certain group of ruling coalition MPs,” Karl told reporters. “Especially within the Progressive Party.”