Icelandic party leaders debate tax proposals ahead of 2024 parliamentary elections

In the lead-up to the 2024 parliamentary elections in Iceland, recent discussions among party leaders have highlighted various tax proposals. Leaders of leftist parties have advocated for increased fishing fees, higher capital gains taxes, and fees for tourists. In contrast, leaders from the Independent and Center parties are calling for tax reductions and a decrease in government spending.

Svandís Svavarsdóttir, chair of the Left-Green Movement, expressed that it is not taboo to seek additional funding from those with substantial wealth. She raised concerns over the perception that taxes are akin to criminal activities. The Left-Green Movement aims to create a tiered capital gains tax system, with plans to increase the tax rate for higher income earners while maintaining the current 22% rate for lower earners. They also propose raising fishing fees and implementing additional charges within the tourism sector.

Similarly, the Pirate Party leader, Þórhildur Sunna Ævarsdóttir, suggested eliminating value-added tax exemptions for the tourism sector, noting that accommodation and organized tours currently benefit from a lower VAT rate of 11% compared to the general 24%. She emphasized the strain tourism places on infrastructure and called for infrastructure fees from the sector.

Kristrún Frostadóttir, the leader of the Social Democratic Alliance, stated the party does not intend to raise taxes on “working people.” However, they propose increasing the capital gains tax from 22% to 25% and raising the exemption threshold to prevent tax increases for those with low capital incomes. The party also advocates for general resource taxes, including a fee on each kilowatt hour of electricity produced, regardless of the production method, and an increase in fishing fees.