The Icelandic Minister for Finance and Economic Affairs has announced the removal of customs duty on all items – except food – from 1 January 2017.

This move, together with the previously announced removal of customs duty on clothes and shoes, will lead to an estimated fall in State revenue of some ISK 6 billion (approx. €40.7 million) per year.

Finance Minister Bjarni Benediktsson is, however, upbeat about the financial perspectives.

“Despite the removal of these customs duties and fees, State revenue is increasing and there is no need for any countervailing revenue generation measures,” Benediktsson explains. “These measures are aimed at reducing prices, increasing price transparency, strengthening competitiveness and effectiveness, and making better use of production factors.”