Iceland have been on our bucket list for a very long time. The natural beauty of the country landscapes to the magical northern lights have always made us wanderlust for Iceland.
When we heard the news that Iceland was ending their 11 percent reduced rate of the value-added sales tax, we thought that it was an April Fool’s Joke. Unfortunately it is not. 🙁
For us costs of going to Iceland have always been a decisive factor in preferring a cheaper and value added holiday destination.
Taxes on hotels, travel agents, campsites and basically all tourist services will increase to the old regular rate of 33.5 percent.
Iceland announced that the end of the 11 percent reduced rate of value-added sales tax will make a standard holiday there about four percent more expensive.
Reykjavik estimates that the higher tax rate will reduce tourists coming to the island nation by 1 – 2 percent. However the finance ministry noted that cost was not a decisive factor for visitors to the country. But for Ann and I, cost is a very important factor when we decide on our holidays.
As for now, we would probably put Iceland on hold on our bucket list and hope that the the increase in taxes would only be temporary.
Do you guys think that the increase in taxes is justified even though tourism in Iceland have exploded seven fold in the last 7 years? Share us your thoughts.
featured photo by Fernando Garcia