Iceland MP speaks against high taxes on imported goods

Icelandic-money-02Guðlaugur Þór Þórðarsson, a member of parliament for the opposition’s Independence Party (Sjálfstæðisflokurinn) took a stance against high taxes on goods imported to Iceland, which according to him penalize families with smaller revenues.

Icelanders traditionally shop for clothes and electronics while on holiday abroad, as similar items can cost up to twice as much in Iceland, due to hefty import taxes. According to Þórðarsson, this is particularly discriminatory towards people who can’t afford to travel out of Iceland.

A recent poll shows that over a third of Iceland residents have bought most of their clothes abroad while 42 percent said they were abroad when they last went shopping for children’s clothes. The poll indicates that while 75 percent households with monthly revenues inferior to ISK 250000 (€ 1500) last bought children’s clothes in Iceland, more than half of households with monthly revenues higher than ISK 1 million went shopping for children’s clothes abroad.

“The import tax is in fact a poverty tax. Many households in Iceland have no other option than to do their shopping here, while richer households go shopping abroad, it’s a fact”, says Þórðarsson.

The Icelandic MP believes that lowering import taxes would not only improve the living standards of power households but also boost Iceland’s economy as Icelanders would be less likely to go abroad to do their shopping, which would promote trade and employment in Iceland.

“There’s no reason why we should supply work to shopkeepers in Boston rather than those on Laugavegur [Reykjavik’s main shopping street]”, says Þórðarsson in conclusion.