Lawmaker defends targeted bank tax to support balanced budget

Arna Lára Jónsdóttir, chair of Parliament’s Economic Affairs and Business Committee and an MP for the Social Democratic Alliance, said she had no difficulty as a social democrat justifying a targeted bank tax, mbl.is reports.

Speaking at an SFF meeting on Monday morning, she said Icelanders lived in a society where people were responsible for one another. The shared goal was to reduce interest rates and inflation, she said, adding that a balanced budget was central to achieving it.

She said she wanted those able to bear heavier burdens to take part in the effort. The owners and boards of banks could choose to contribute without passing the cost on to customers, which could otherwise affect prices.

“That is a decision for those who run the banks,” she said.

Asked about the profitability of Icelandic banks compared with banks internationally, Jónsdóttir said Icelandic banks operated in a microeconomy with a very small currency and on an oligopolistic market.

“That must affect their position,” she said.

When asked about an impact assessment of the tax increase, she said the more important question was what the taxes were being used for and whether they were put to good use. She added that she did not suffer from any “tax fear”.