Iceland will implement visitor tax, prime minister says

Travelers heading to Iceland may soon pay more for their trip. The Nordic island nation will implement higher taxes for tourists to help protect its environment, Prime Minister Katrin Jakobsdottir said.

The tax will not be high initially, Jakobsdottir said in a recent interview on Bloomberg Television.

“Tourism has really grown exponentially in Iceland in the last decade, and that obviously is not just creating effects on the climate,” she said. “It’s also because most of our guests who are coming to us are visiting the unspoiled nature, and obviously it creates a pressure.”

The tax will be a broader version of a previous accommodation tax the country suspended during the pandemic, according to a spokesperson for Iceland's Ministry of Finance and Economic Affairs. "It is intended to expand taxation to cover passengers on cruise ships alongside hotels, recognizing the impact on our seas as well as land," the spokesperson said in an email.

The policy is planned to take effect in 2024, the spokesperson said, and other details including amounts "will be outlined in draft legislation in the coming weeks."

The fee hike comes as the country works to meet its goal to become carbon neutral before 2040. Iceland, with its hot springs and black sand beaches, is hugely popular among travelers, and the country saw more than 1.7 million overnight visitors from outside the country in 2022, according to the Icelandic Tourist Board.

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

Iceland is not the only destination to implement such a policy. Venice has plans to implement a fee for day trippers to the Italian city, in an effort to manage large numbers of tourists, and Bali will introduce a tourist tax for foreign visitors next year.

Nathan Diller is a consumer travel reporter for USA TODAY based in Nashville. You can reach him at ndiller@usatoday.com.

This article originally appeared on USA TODAY: Iceland to implement visitor tax