Higher Benefits and Tariffs on Alcohol and Tobacco Skip to content

Higher Benefits and Tariffs on Alcohol and Tobacco

The Government of Iceland is planning to boost revenue for the treasury by ISK 8.3 billion (USD 66 million, EUR 51 million) next year, such as by higher tariffs on alcohol and tobacco. These actions are to finance the increase in child benefits, among other issues.

cigarettes04_esaPhoto by Eygló Svala Arnarsdóttir.

The co-called ‘tapeworm’ (bandormurinn) was discussed at the Icelandic parliament, Alþingi, on Friday. The bill is the revenue part of the budget bill and concerns actions the government is planning to generate revenue for the treasury, Fréttablaðið reports.

Finance Minister Katrín Júlíusdóttir will also submit a special bill on reviewing the excise tax, which is to result in additional revenue of ISK 800 million (USD 6.4 million, EUR 4.9 million) for the treasury.

Environmental and natural resource taxes that will be introduced next year are to generate ISK 5.9 billion. However, the 100 percent repayment of VAT for maintenance projects will be extended by one year, which will cost the treasury ISK 1.5 billion.

In addition to the ISK 2.5 billion it will cost to increase child benefits, plans to extend the 30 percent increase of interest reliefs by one year will cost the treasury ISK 2 billion.

Changes connected with wage contracts, most notably the decrease in the unemployment insurance tax by 0.4 percent, will cut the treasury’s revenue by ISK 3.9 billion.

To finance such actions, increases of various tariffs are planned, in addition to alcohol and tobacco, also on gasoline, oil, car ownership and broadcasting, among other items.

ESA

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