Iceland to Cut Petrol Tax as Costlier Oil Risks Price Outlook

Kristrun Frostadottir. Photo by Nichlas Pollier /Photographer: Nichlas Pollier/BlArticle content(Bloomberg) — Iceland will temporarily lower taxes on gasoline to help ease inflation after the war in Iran sent prices of fossil fuels soaring.Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentThe government will cut the value added tax on petrol to 11% from 24% for four months starting May 1, Prime Minister Kristrun Frostadottir told reporters on Friday. Her cabinet will also work toward making the island less dependent on oil, the premier said. Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Article contentArticle content“The aim is to reduce the effects of the oil price increases on Icelandic homes and businesses,” Frostadottir said, adding that she hopes the government’s initiative will “challenge” others to lower prices this summer in order to tame consumer-price growth.Article contentTop StoriesGet the latest headlines, breaking news and columns.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article contentInflation continues to run rampant on the north Atlantic island, with the latest reading of 5.4% in March the highest since September 2024. The country’s central bank last month changed course and hiked interest rates for the first time since 2023, signaling that another increase may be expected in May. Article contentThe government will also allocate 500 million kronur ($4 million) toward the build-up of EV charging stations to speed up the transition from fossil fuels. Article content“In the long run, we need to make Iceland less dependent on oil,” Frostadottir said.Article contentThe government simultaneously introduced its first-ever business strategy, spanning a decade to 2035. Its key focus is on strengthening and diversifying the country’s export sectors, especially those not reliant on limited natural resources. Article contentTourism was the main driver for Iceland’s recovery from its economic collapse around the global financial crisis. It’s been the country’s biggest export industry for more than a decade after surpassing the traditional fisheries sector and aluminum industry in size. Article contentArticle content“We will look to sectors with high productivity, such as fish farming, bioscience, data centers and innovation,” the prime minister said.Article contentElements of the Plan:Article contentBoosting education in STEM subjects.Improving the framework for investment in energy projects and shortening the time it takes to obtain a license.Speeding up the building of energy distribution infrastructure, such as by changing the law on expropriation so landowners cannot hinder grid construction on their land.Bolstering foreign direct investment around the country.Offering a 25% reduction in income tax for foreign specialists for the first three years after hiring.Increasing investment in computing infrastructure and machinery for the development of artificial intelligence, in cooperation with the private sector.Article content—With assistance from Ott Ummelas.Article contentTrending This creative money transfer strategy among family members could raise red flags with CRA Personal Finance Global rate path veers higher in wake of another Trump shock Economy Posthaste: More Canadians desperate for tax refund to plug holes in their finances News How the global energy crisis is shaking Canada from coast to coast — and could leave a lasting legacy Oil & Gas BYD to open 20 car dealerships in Canada this year Autos Share this article in your social networkCommentsYou must be logged in to join the discussion or read more comments.Create an AccountSign in Join the Conversation Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information. This creative money transfer strategy among family members could raise red flags with CRA Personal Finance Global rate path veers higher in wake of another Trump shock Economy Posthaste: More Canadians desperate for tax refund to plug holes in their finances News How the global energy crisis is shaking Canada from coast to coast — and could leave a lasting legacy Oil & Gas BYD to open 20 car dealerships in Canada this year Autos