Local Councils Demand Share of Tourist Tax Skip to content
Photo: The municipality of Skútustaðahreppur includes Mývatn lake, one of the most visited areas in North Iceland. .

Local Councils Demand Share of Tourist Tax

The local council of Skútustaðahreppur wants to see taxes collected from overnight stays directed to local authorities for the building of tourist infrastructure, RÚV reports. The government previously pledged to transfer the funds earned through taxation of overnight stays to municipal governments during this electoral term as part of a revision of income. The matter, however, is absent from next year’s budget bill and not listed on the parliament’s agenda this winter.

The local council of Skútustapahreppur expressed disappointment at the lack of action on the issue. Þorsteinn Gunnarsson, the council’s director, said the funds were much needed. “There are a number of projects that have been on hold that this funding could be used for. Construction of toilet facilities, hiking and cycling paths around Mývatn lake and many more. So this is funding that would immediately go into the development of infrastructure here.”

Based on the number of overnight stays, it is estimated the tax will put ISK 30 to 35 million ($256,000-299,000/€221,000-258,000) in the treasury’s coffers, which could be funnelled to local governments. Þorsteinn Gunnarsson says transferring the taxes to municipalities should be a simple matter.

Aldís Hafsteinsdóttir, the new chairperson of the Icelandic Association of Local Authorities, urges the government to amend the budget bill and transfer the overnight stay tax to local councils starting next year. “The overnight stay tax is intended to support development at tourist destinations all across the country. So it is important that it goes to those who are overseeing the destinations, which are to the greatest extent the local councils.”

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