Tax cuts and housing reforms announced
Eygló Harðardóttir, Bjarni Benediktsson and Sigmundur Davíð Gunnlaugsson announcing the new govenrment measure this morning. Photo: Golli.
The Icelandic government has announced a series of new measures related to the ongoing wage agreement negotiations.
Iceland’s Prime Minister, together with the Ministers for Finance & Economic Affairs and Social Affairs & Housing today set out eleven measures covering various aspects of taxation, welfare, housing, economic policy and public finance.
More disposable income for earners
The new measures include changes to personal income tax and a simplification of the income-tax system. Middle-income earners are set to see their disposable income rise by just under ISK 100,000 (approx. €680) a year, while a new two-tier tax system will be introduced to improve transparency and effectiveness.
More social housing
The government has also committed to create better conditions for developing the housing market in Iceland. Some 2,300 new social housing units will be built in the period 2016-19 to provide low-income families with long-term rental accommodation.
Among other housing measures announced are plans to lower construction costs, increase housing benefit and amend taxation to bring down rental prices and increase supply. First-time buyers will benefit from specific financing measures.
Economic stability key
Planned government action also includes: abolishing customs tariffs on clothing and shoes, reducing healthcare costs for patients, stepping up efforts to combat tax evasion, and reviewing regulation and monitoring of economic activity.
Central to the measures announced today is the government’s stated wish to ensure that wage agreements entered into in both the public and private sectors do not cause economic instability.
