The consumer standard used by the Icelandic Ministry of Finance in its calculations on which a bill on changes to the VAT system are based must be reviewed, according to deputy MP for the Independence Party Bryndís Loftsdóttir, who reasons that the ministry is assuming too low amounts for grocery purchases.
“I can’t make it work out. I don’t consider myself to be overly wasteful but I try to buy healthy food, which is sometimes expensive. I estimate that I will spend [ISK] 2 million in food this year … but it is assumed that a family of four will spend 1 million,” Bryndís stated.
The ministry explained that its calculations are based on a consumer survey carried out by Statistics Iceland. The total monthly expenditure of a family of four is estimated as ISK 465,000 (USD 3,900, EUR 3,000), of which 16.2 percent are spend on food and beverages.
This equals ISK 75,330 spent on food and drink per month, or ISK 2,477 per day for the whole family, ISK 619 per person. Thus, the ministry assumes that one meal costs ISK 206 (USD 1.7, EUR 1.4) on average.
This is a much lower amount than the City of Reykjavík calculates for school meals. The canteens buy groceries in bulk and cook as inexpensive meals as possible. Still, the ingredients for each portion costs ISK 260-ISK 54 more than the ministry expects each meal at home to cost.
The public’s credit card usage also indicates that people spend higher amounts on food than assumed in the bill.
“It’s important to have all accurate conditions when announcing such significant changes to the VAT system as planned,” Bryndís said. “And these numbers… I doubt that they are correct and call for a closer look.”
It is planned to increase the VAT on food from 7 to 12 percent.
Minister of Agriculture Sigurður Ingi Jóhannsson told ruv.is earlier today that he believes parliament will review the issue.
