Prices in Iceland lowered today Skip to content

Prices in Iceland lowered today

The VAT (value added tax) on nearly all groceries, CDs, books, newspapers, magazines and restaurant and hotel services will be lowered from 14 and 24.5 percent to seven percent today.

According to the Consumer Agency, this tax cut should result in a price reduction of over six percent for goods which had a 14 percent VAT and the price of goods with a 24.5 percent VAT should drop by over 14 percent. Fréttabladid reports.

Additionally, excise taxes on groceries except sugar and sweets will be canceled today and common taxes of imported non-processed meat products will be reduced by up to 40 percent. Experts have debated to what extent the tax reduction will benefit consumers.

Fridrik Ármann Gudmundsson, the owner of the grocery store Melabúdin in Reykjavík, said: “I’m very satisfied with this price cut. If only it had happened sooner.” Gudmundsson and his staff spent last night changing the price tags in his store.

The VAT on heating will also be reduced today, as well as the tariffs for the tunnel underneath the fjord Hvalfjördur, between Reykjavík and Borgarnes.

Click here to read about the supermarkets Krónan and Bónus, which already lowered their prices last week, and here to read about the announcement of the VAT reduction last year.

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