Faroe Islands collect more tax as tax burden falls

Tax and social contributions in the Faroe Islands generated 12.1 billion kroner in 2025, up 414.5 million kroner, or 3.5 per cent, from 2024, KVF reported.

The tax burden fell to 41.2 per cent, down 0.8 percentage points from the previous year. It measures taxes and duties as a share of gross domestic product.

GDP grew by 5.6 per cent in current prices, outpacing the increase in tax revenue and lowering the tax burden.

Revenue from motor vehicle registration tax rose by 82.5 per cent after the registration charge on electric cars increased. Revenue from fuel oil duty also climbed significantly after the duty was raised early in the year.

Despite the increases in some duties, total revenue from duties fell as receipts from major levies, including value-added tax and the aquaculture production fee, declined, Statistics Faroe Islands said.