Icelandic opposition blocks August parliament session on fuel VAT cut

Iceland's opposition parties are refusing to convene parliament in August to extend a temporary reduction in value-added tax (VAT) on fuel. The Social Democratic Alliance and the People's Party have indicated they will not support an extraordinary session.

This stance means the current 11% VAT rate on fuel, which was a temporary measure approved by parliament in the spring, will expire at the end of August. Without an extension, the VAT is set to revert to its standard rate of 24%.

This reversion is expected to lead to a significant increase in fuel prices across the country. The opposition's refusal to convene parliament leaves the government unable to act on extending the tax reduction before the deadline.

Jón Gunnarsson, a member of parliament for the Independence Party, had previously stated that the opposition was ready to meet for a session to approve the continued reduction. However, this appears not to be the case. Finance Minister Daði Már Kristófersson had indicated that any extension would have to wait until at least mid-September, when parliament is scheduled to reconvene.