Faroese treasury to lose 20 million krona from fuel VAT suspension

The Faroese government’s proposed suspension of value-added tax (VAT) on petrol and diesel until 1 August will reduce state revenue by 20 million krona, according to revised budget estimates presented to parliament.

The finance minister submitted the amended forecast to the Løgting (Faroese Parliament) this week, showing the VAT exemption on fuel will cut expected income by the same amount. The proposal, first debated earlier this year, has now been referred to the finance committee for review.

Parliament initially approved the VAT suspension in principle as part of broader budget adjustments for 2026.