The Left-green led coalition government which is expected to assume power tomorrow will not raise the value added tax on tourism. Instead it plans to levy a tax on all arriving airline passengers and raise the tax on hotel stays.
Industry supports tax overhaul
The 2018 budget, drafted by the outgoing government had included a plan to double the value added tax paid by companies in the tourism industry. This tax hike had been opposed by the industry, as it was expected to have a disproportionate impact on small and medium sized businesses and companies in areas further from Reykjavík.
Read more: Report: Was the government collapse good news for foreign visitors, the tourism industry?
The tourism industry has for years argued that a better way to raise taxes to pay for infrastructure investments in tourism was to levy a flat tax on all airline arrivals and raising the tax on hotel stays. The tax on hotel stays will be shared by the state and the municipalities where the tax is collected. Local governments have been calling for a larger share of the revenue from tourism to pay for enormous increases in expenditure on investment and maintenance at popular sites.
Read more: Grand Coalition led by Left Greens could assume power by the end of the week
The National Broadcasting Service reports that the overhaul of the tax system of tourism is part of the policy statement of the coalition government of the Left Green Movement, the conservative Independence Party and the centrist Progress Party. The national committees of the three parties will meet today to vote on the policy statement. If the policy statement is approved the government will assume power tomorrow.
The Left-green led coalition government which is expected to assume power tomorrow will not raise the value added tax on tourism. Instead it plans to levy a tax on all arriving airline passengers and raise the tax on hotel stays.
Industry supports tax overhaul
The 2018 budget, drafted by the outgoing government had included a plan to double the value added tax paid by companies in the tourism industry. This tax hike had been opposed by the industry, as it was expected to have a disproportionate impact on small and medium sized businesses and companies in areas further from Reykjavík.
Read more: Report: Was the government collapse good news for foreign visitors, the tourism industry?
The tourism industry has for years argued that a better way to raise taxes to pay for infrastructure investments in tourism was to levy a flat tax on all airline arrivals and raising the tax on hotel stays. The tax on hotel stays will be shared by the state and the municipalities where the tax is collected. Local governments have been calling for a larger share of the revenue from tourism to pay for enormous increases in expenditure on investment and maintenance at popular sites.
Read more: Grand Coalition led by Left Greens could assume power by the end of the week
The National Broadcasting Service reports that the overhaul of the tax system of tourism is part of the policy statement of the coalition government of the Left Green Movement, the conservative Independence Party and the centrist Progress Party. The national committees of the three parties will meet today to vote on the policy statement. If the policy statement is approved the government will assume power tomorrow.
