Iceland mulls new visitor taxes
‘ VICTIMS OF SUCCESS’
• One of the world’s hottest and most expensive holiday destinations could soon become a little more expensive.
Overwhelmed by a record number of visitors in spite of its far- flung location, Iceland’s government is considering ways of raising taxes in the tourism sector. The alternative would be to limit sightseers’ access to the country’s most popular spots.
“The sector and all of us have to be careful not to become victims of our own success,” Thordis Kolbrun Reykfjord Gylfadottir, Iceland’s tourism minister, said in a recent interview in Reykjavik.
A currency plunge and its location for scenes featuring in the popular TV series Game of Thrones helped create a tourism boom, with visitors’ numbers growing exponentially — from 490,000 in 2010 to an estimated 2.3 million this year. That’s a l ot, considering Iceland’s population totals less than 340,000. Tourism is now the country’s main export, bringing in a forecast 45 per cent of foreign exchange — or US$5.1 billion ( 560 billion kronur) — in 2017, according to Islandsbanki, the country’s secondlargest lender.
Still, Gylfadottir worries that overcrowding may ruin the experience for visitors and spoil natural treasures. Among the country’s most popular destinations are Thingvellir, a UNESCO World Heritage Site, and Jokulsarlon, an otherworldly glacier lagoon on that island’s southeastern coast now at the centre of a legal dispute.
The minister is calling on her partners in government and the tourism industry to be “brave.”
“Some areas are simply unable to facilitate 1 million visitors every year,” she said. “If we allow more people into areas like that, we’re losing what makes them special — unique pearls of nature that are a part of our image and of what we’re selling.”
The coalition government is considering a number of options. They include forcing bus companies and tour operators into buying a special licence or hiking the existing levy on hotel rooms. Ministry officials say the hotel tax generated 400 million kronur in revenue in 2016 and could bring in as much as 1.2 billion kronur this year. Iceland’s previous government attempted and failed to pass a bill that would have required all visitors — Icelanders and foreigners — to purchase a “nature pass” priced at US$14.
Any tax hike would add to the already considerable bills tourists have to foot when visiting the country. A taxi ride from the airport to the city centre costs around US$ 150; while hotel rooms are as much as a third more expensive than comparable accommodation in other Nordic capitals and the price of alcoholic beverages is more than double the EU average, according to Islandsbanki.
The ministry says proceeds of any new levy would be used to improve infrastructure and facilities.