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Thursday, 29 October 2026 Icelandic stories. Global audience.
Business & Politics

Iceland proposes tax hikes on tourism sector in new budget bill

The government budget bill for next year includes higher VAT on bathing pools and a new nature fee, likely raising costs for tourists. The measures were first reported by Vísir.

A fishing harbour with mountains behind
File photo.

The Icelandic government has presented its budget bill for next year, which includes significant tax increases that specifically affect the tourism sector, according to a report from Vísir.

One of the main proposals is to raise the value-added tax (VAT) on bathing pools, or baðlón. If service providers pass on the entire increase, visitors can expect prices to rise by 11.7 percent at these popular tourist destinations.

Another measure in the bill would introduce a new nature and infrastructure fee, which is set to make day trips on the so-called Golden (Gullna) route more expensive. Details about the exact amount and scope of the fee have not yet been disclosed.

Sources