Iceland Prime Minister Announces Plans for Tourism Tax

The Prime Minister of Iceland announced plans to add a tax on travelers visiting the island to help offset tourism's impact on the environment.

According to Bloomberg.com, Prime Minister Katrin Jakobsdottir said last week that the tax would not be expensive “ to begin with,” but acknowledged the impact of travelers on local ecosystems and climate.

The travel industry is responsible for six percent of Iceland’s gross domestic product (GDP), but the nation has committed to a carbon-neutral goal by 2040, and officials are working to offset the environmental ramifications of an increasing number of international arrivals. 

“Tourism has really grown exponentially in Iceland in the last decade and that obviously is not just creating effects on the climate,” Jakobsdottir told Bloomberg. “Also, most of our guests visit our unspoiled nature and obviously that creates a pressure.”

“A lot of the companies working in the tourism sector are finding ways to really turn over to circular economy,” Jakobsdottir continued. “So that change is happening, but it is a challenge.”

Iceland isn’t the only popular destination to utilize the tax system, as Venice, Italy, will try a tourist fee initially supposed to take effect in the summer of 2022.

To combat overcrowding during Venice’s peak visitor days, officials will charge a €5 or $5.35 tax to day-trippers visiting Old City starting in the spring of 2024. Overnight travelers with hotel stays, commuters and those with properties in Venice will be exempt.

Earlier this year, officials in Bali revealed that all international tourists would be charged a tax—about $10 per person—starting next year, with the money to be used to preserve the province’s culture and environment.

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