Faroese government could double travel subsidies for half the cost of fuel tax exemption

The Faroese government could raise the energy subsidy to 12,000 kronur and increase daily travel allowances by five kronur for a fraction of the cost of exempting petrol and diesel from VAT, according to a report by public broadcaster Kringvarp Føroya.

Minority members of the Finance Committee, Bjørg Brynhildardóttir Egholm of the Republic party and Ruth Vang of the Progress Party, argue that the proposed VAT exemption for fuel—costing 20 million kronur—would be better spent on broader support measures. Their alternative plan would cost the national treasury around nine million kronur.

Egholm, deputy to Finance Minister Sirið Stenberg, and Vang stated they had been unable to secure the necessary signatures to bring their proposal on energy subsidies and travel allowances before parliament when sessions began in April. They also noted that increased routes by the public transport operator Bygdaleiðir would likely have allowed more people to use buses.

The Finance Committee is expected to finalise decisions on both the fuel VAT exemption and the alternative subsidy proposals on Tuesday.