Capital Region exempt from resource taxes?
The Althingi is currently considering a bill to increase fishing fees. It is clear that the impact of the bill will be very different in different parts of the country. If we look at the constituency that we are the signatories to, the burdens will not increase any more. A KPMG summary, prepared for the Association of Fisheries Municipalities, states that the fishing fees imposed in the Northeast Constituency will be around ISK 6.2 billion, taking into account the location of the operations. This is an increase of ISK 3.5 billion from the current arrangement, which corresponds to an increase of over 77 percent. These ISK 3.5 billion will therefore end up in the treasury and fisheries companies in the constituency will have less money to spend on investments, purchases of services and payroll.
If the current bill becomes law, the fisheries sector in the Northeast Constituency will account for 45 percent of all fishing fees paid. It has been incredible to watch the debate about whether fishing fees are a rural tax or not. The burdens on the Northeast Constituency – and plans for further increases – show that there is no mistaking that this is a pure rural tax. The increase in fishing fees paid in the capital area will only be about 500 million krónur according to the bill. This is incorrect.
Some people pay resource taxes...
In everyone's mind, the term "the country's resources" includes more than just fish stocks. In recent years, the fishing industry has paid about a third of the gross profit from fishing to the state treasury. Other companies in Iceland that utilize the country's resources, however, are exempt from such additional taxation. If there is a general consensus among the people that companies that utilize resources pay more taxes than others, then it must be possible to make a reasonable demand that equality be observed in this regard.
Between 2020 and 2023, fisheries companies in the Northeast Constituency have invested a combined total of ISK 75 billion, representing nearly 90% of their accumulated profits over the same period. The dividend payout ratio has ranged from 10 to 25 percent, and fishing fees paid have been multiples of dividend payments.
...but others don't
Without intending to disparage Reykjavík Energy, it is interesting to compare the company's performance, dividends and investments with the fishing industry. Reykjavík Energy's accumulated profit from 2020 to 2023 was around ISK 32.5 billion. Dividend payments to the company's owners during the period correspond to just over half of the accumulated profit, or around ISK 16.5 billion. Reykjavík Energy paid no resource taxes during the period.
Let's be equal.
The debate about resource taxes in Iceland has long been a hot topic in Icelandic society. There are differing opinions on whether they should be imposed in general, or how high they should be. This article does not aim to answer those questions. The undersigned request that equality be observed when imposing resource taxes, if the government wishes to collect them. The resource taxes that are currently collected have so far almost exclusively fallen on rural areas. In particular and especially in the Northeast and South constituencies.
If the government's understanding is that the treasury is the nation, then the current system of resource taxation is placing a very unequal burden on the country's citizens depending on where they live. The increases in fees currently before the House of Representatives are only intended to further increase the disparity in taxation between the capital and the rural areas - and that was enough. Both when it comes to where in the country the fishing fees are collected, but also when considering the tax burden on those who use the country's resources.
All sensible individuals see that now is the time to pause and rethink the matter.