Tourism Sector Raises Concerns over Proposed Fees

2026-03-28 - 11:33

Proposed changes to taxation and visitor charges are prompting concern within Iceland’s tourism sector following the government’s latest budget proposals. According to discussions within the Ministry of Industries, a new infrastructure fee for both domestic and international visitors has been considered, with figures reportedly around ISK 5,000. No final decision has been confirmed. What's the Story? Proposed infrastructure fee discussed within the Ministry of Industries, with figures around ISK 5,000 for visitors Government budget includes VAT increase on bathing facilities from 11% to 24% Concerns raised by Icelandic Tourism Association over impact on sector competitiveness The Blue Lagoon in Iceland. Credit: Alamy. Flickr (Creative Commons) Industry warns impact At the same time, the government’s budget plan presented yesterday includes a proposed increase in VAT on bathing facilities from 11% to 24%. Jóhannes Þór Skúlason of the Icelandic Tourism Association said the sector faces growing pressure. “The government has to choose whether it wants to have a comprehensive tax collection, a nature and infrastructure tax, as was introduced in the government agreement, or whether it intends to further destroy the competitiveness of the industry and the operating conditions of the companies,” he said in an interview with Sýn. He added that no confirmed amount has been presented for the proposed fee. “So we’re just blindly jumping into the ocean with amounts and implementations,” he said. When asked about the combined impact of the proposed measures, he responded: “Undoubtedly.” The proposals come amid ongoing discussion about the sustainability and regulation of tourism, as previously reported by Iceland Review.