Ingveldur Anna Sigurðardóttir, a Member of Parliament for the Independence Party, wrote that the government plans to raise an extra 10–11 billion krónur from the tourism industry next year. The article was published on the Vísir news website and later appeared on Sunnlenska, and was first reported by Vísir.
According to Ingveldur Anna, the proposed tax increase would harm Iceland’s tourism competitiveness and do nothing to better distribute tourists by region or season. She also criticised the Minister of Industries and Innovation, Hanna Katrín Friðriksson, saying the government preferred taxation to policies supporting growth in the sector.
Describing the role of tourism in Iceland’s economy, the article recalled the 2010 Eyjafjallajökull eruption, which halted air traffic across Europe due to volcanic ash. From that event, the author noted, the ‘Inspired by Iceland’ project began, helping to make tourism one of Iceland’s main economic pillars and its largest export industry. The article states that around 2.3 million tourists visited Iceland in 2025 and that tourism now accounts for approximately 9% of the country’s value creation.
Citing a Reykjavík Economics report for the Icelandic Travel Industry Association, the article estimated tourism’s tax footprint at nearly 200 billion ISK in 2024. The author further claimed about one third of the foreign exchange generated by tourism returns to local society as taxes and fees.
The article pointed out Iceland’s value-added tax (VAT) rate on tourism is 11%, lower than the standard rate of 24%, and compared it to other Nordic countries, saying Norway and Sweden charge a 12% VAT and Finland 13.5%.
Job numbers in tourism have quadrupled in South Iceland and tripled in Suðurnes since 2008, according to the article.
Separately, the Icelandic Travel Industry Association and regional offices of West Iceland and the Westfjords announced a meeting to discuss the state and future of tourism in the Northwest. The meeting will be held at Hjálmaklettur, the cultural house of Borgarfjörður in Borgarnes, starting at 17:00 on Thursday 22 October.
Background
Alþingi, Iceland’s parliament, is the country’s national legislature and one of the oldest in the world, established in 930. Borgarbyggð is a municipality in western Iceland; Borgarnes, where the meeting will be, is its largest township.
Sources
Links: Pinterest
- Independence Party in Icelandic
- Vísir (first reported) in Icelandic
- Sunnlenska in Icelandic
- Bæjarins besta in Icelandic
- Feykir in Icelandic
Image: Steinninn / Wikimedia Commons (CC BY-SA 4.0) · licence, original (resized) Illustrative image.
