Rural leaders condemn tourism tax plans at heated meeting

Local council leaders in Flói and the upper Árnessýsla region strongly opposed government plans to raise value-added tax on bathing lagoons and introduce charges at tourist attractions, mbl.is reported. The meeting was held during Parliament’s constituency week.

“We were frank about what the government is proposing for our region and strongly opposed it,” Jón Bjarnason, head of Hrunamannahreppur local council, told mbl.is. He said council leaders did not believe the measures would reduce inflation or interest rates, and that investors in the region were already concerned about the proposed taxes.

“This affects the whole community. That is simply a fact,” Jón said. He described the responses from governing-party MPs as mixed.

According to sources cited by mbl.is, Víðir Reynisson, a Social Democratic Alliance MP for the South constituency, left the meeting unhappy and without saying goodbye after local officials criticised the plans. mbl.is was unable to reach him for comment.

Helgi Kjartansson, head of Bláskógabyggð local council, said all the councils represented at the meeting agreed in their opposition. He called the plans “complete folly” and said there had been no consultation with the tourism industry in Bláskógabyggð or along the Golden Circle, nor with the local council.

Helgi said tourism development and investment were already slowing. He questioned what analysis supported the plans and whether other options, such as a general entry fee, had been considered.

A briefing note from Bláskógabyggð to MPs, seen by mbl.is, says investment in bathing lagoons and related businesses in South Iceland exceeds 35 billion Icelandic krónur and supports more than 400 full-time jobs. Two bathing lagoons opened in the municipality within a year: Laugarás Lagoon in Laugarás and a renovated and expanded Fontana in Laugarvatn. Plans for a hotel beside Laugarás Lagoon have already been put on hold, the note says.

The municipality warns that full-time jobs could be at risk and tourism could become seasonal again. It also says the municipality has invested heavily in infrastructure, including water supplies, and could fail to recoup that spending if the sector contracts. The note raises the risk that tourists will choose other countries and says Icelanders would also need a nature pass. Local leaders called for dialogue with the government.