Westfjords group urges review of cruise ship taxes

The Westfjords Progress Association is calling for a review of tax changes that have made cruise ship visits to Iceland more expensive, mbl.is reported. The association says cruise passengers in Ísafjörður fell by 40,000 year on year, a decline it says matters to local businesses.

Bookings also point to a significant drop in cruise ship calls to Ísafjörður in the coming years. The association said the trend warrants an assessment of the overall impact of recent tax changes, including the introduction of an infrastructure fee charged per passenger. It noted that the decline in ship calls cannot all be attributed to the fee.

An analysis cited by the association found that cruise ship visits accounted for 55 per cent of foreign card spending at businesses in Ísafjörður over the summer. In neighbouring communities, foreign card spending was 52 per cent higher on days when ships were in port in Ísafjörður.

“The state cannot focus only on what it collects in new taxes and fees while ignoring what is lost by businesses and municipalities,” said Guðmundur Fertram Sigurjónsson, a spokesperson for the association. He said it was poor economic management to tax a growing industry until it began to contract, then respond by raising taxes further.