Iceland Plans to Charge Tourists at State-Owned Natural Wonders Next Year

Iceland plans to start charging tourists at some of the country's most famous natural attractions, while exempting Icelandic residents from the new fees.

Finance and Economic Affairs Minister Daði Már Kristófersson said the measure could raise 5 billion Icelandic krona for the treasury next year. The government is considering charges at state-owned sites including Þingvellir, Gullfoss and Geysir. Kristófersson expects collection to begin around the middle of next year, although the industry minister must present the proposal.

The minister said the fees would target visitors rather than Icelanders, arguing that residents have already paid for the development of the sites. The tourism charge forms part of a package of measures expected to increase government revenue by 22.6 billion krona.

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The most obvious examples are Þingvellir, Gullfoss and Geysir, but the state owns a very large share of Iceland's natural wonders.

The largest item is a bank tax, scheduled to take effect at the start of the year and expected to raise an additional 6 billion krona. Other measures include a mileage charge worth 4 billion krona, a change to the VAT classification of bathing lagoons worth 4 billion, and a reduction in housing VAT refunds expected to raise 3.6 billion krona.

Kristófersson presented a budget forecast with a 5 billion krona surplus, which would mark the first surplus since 2019. The accumulated treasury deficit since then has reached 866 billion krona, attributed to measures linked to the pandemic, volcanic activity on the Reykjanes Peninsula and other factors. Defending the bank tax, he said inflation had given banks an unexpected windfall, while noting that some burdens on banks stem from central bank rules that could later be reversed.

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It is nevertheless important to keep in mind that most of the charges on the banks stem from rules set by the Central Bank, which the Central Bank will be able to withdraw.