Iceland’s salmon farmers face new tax rise

Salmon farmers in Iceland will be paying appreciably more in taxes this year, the Reykjavik government has ruled.

The aquaculture ”fee” rises from 3.5% to 4.3% although an original Ministry of Finance proposal for a 5% rise was rejected.

The government, which decided before Christmas to increase the rate, believes that the new rates will net ISK 2.1bn (almost £12m) during 2024.

In practice the aquaculture fee this year will be ISK 37.80 (£0.22) per kilo of gutted farmed salmon against ISK 18.33 (£0.10) over a year ago and around ISK 18.90 (£0.11) per kilo for rainbow trout. The tax raised is calculated as a figure per kilo produced, based on a percentage of the price per kilo achieved in Iceland’s Fish Pool commodities exchange.

Critics of the government suggest that the eventual increase will be up to 100%. Around half the £12m will be paid by companies in the Westfjords region, where much of Iceland’s salmon activity is concentrated .

As with Norway, a large proportion of the fee goes to municipalities where aquaculture is carried out. They can expect to receive up to £4m this year. The remainder goes into the Icelandic treasury.

Fish farming in Iceland faces significant new legislation this year as the government prepares a new long term plan for the industry.

But SFS (the Icelandic Association of Fishing Companies) is more than nervous about what is now being proposed.

It believes the government is going against the guidelines proposed by the Boston Consulting Group last year which recommended moderate fees, along with forward thinking, in what is still a growing industry in Iceland. Instead, the government is proposing high and burdensome taxes, SFS says.