Iceland to increase tourist tax

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As Iceland struggles to return to pre-pandemic levels in terms of arrivals, the country has decided to increase the tourist tax. In order to achieve its goal of carbon neutrality by 2040, the current government is considering introducing taxes on visitors, although they will not be high initially.

In an interview with the channel Bloomberg, Icelandic Prime Minister Katrin Jakobsdottir said that many tourists visit the country for its untouched nature and that this creates pressure on the environment. Outside of the capital Reykjavik, the most popular tourist trail is the “Golden Circle”, a 300 km route leading to Iceland’s three most popular natural attractions: Thingvellir National Park, Geysir geothermal area and the Gullfoss waterfall. Many of these sites already have controversial parking fees when they came into effect.

The new taxes, which will likely be implemented in 2024, are a way to ensure that local communities benefit from tourism flows. A local poll in 2022 previously found that almost three-quarters of Icelanders agreed that international visitors should pay for access to nature sites and parks.

In 2022, according to the Icelandic Tourist Board, 1.7 million people visited the country, an increase of 146% compared to 2021, although this figure remains 31% lower than the total number in 2018, a record year . Through August 2023, Iceland received 1.5 million visitors, which would bring it to almost 2.3 million for the year, just 3.4% below 2018 levels. therefore remains one of Iceland’s main resources, generating around 6% of its GDP.

Catherine Mills Avatar