The bill on the adjustment to Iceland’s resource levy has been distributed to Parliament, following a period of public consultation that attracted 112 comments from individuals, companies, stakeholders, local authorities and other interested parties. As always when the quota system is under scrutiny, an angry debate has been taking place.
This is also being played out in public, with TV advertisements from one body bitterly opposed to any change, as well as a clamour of interviews across most of the media as those with interests to defend in one way or another have their say – and that’s in addition to furious exchanges on social media.
The bill is presented by Minister of Industries Hanna Katrín Friðriksson. Changes have been made to the draft bill following consultation, notably in response to the concerns of local authorities. As a result, thresholds have been adjusted so that the effects of the resource levy increase on small and medium-sized companies will be softened.
An appendix has also been added to the bill, detailing the predicted effects on the largest hundred Icelandic fishing companies, the tax implications for seafood companies and a detailed digest of the value creation chain in Norway.
The bill proposes to value catches according to the market price, and in the case of pelagic catches, according to the Norwegian auction. The government argues that this reflects the realistic value of catches of herring, mackerel, blue whiting, cod and haddock, resulting in a levy on fishing operators for access to resources that is in line with real catch values.
According to the Ministry of Industries, which has responsibility for fisheries, the bill will have a positive effect on state income, increasing the state’s revenue from pelagic landings by ISK3-4 billion annually, and by ISK5-6 billion from cod and haddock. The expectation is that 90% of the resource levy increase will fall on the thirty largest fishing operators as the resource levy will total an estimated ISK17.30 billion in 2026. Under the current rules, this would be ISK11.20 billion.
The Ministry expects to see a revenue of ISK18-19 billion annually to the state between 2027 and 2030.
Fishing vessel operators’ federation SFS, which represents those vessel operators and companies expected to bear the brunt of the resource levy adjustment has reacted furiously to the Ministry’s proposed parliamentary bill – to the extent of running a series of TV advertisements that appear to have had a mixed reception among the general public. SFS has issued a raft of dire warnings, stating that the industry’s future is in jeopardy and that companies could be forced to re-examine plans for expansion and investment.
Others within the industry have been more sanguine about the changes, and associations representing small boat owners and operators without quota holdings have offered to pay ISK100 and ISK150 per kilo of cod they are allocated – certainly more than the adjusted resource levy would be for the larger operators who will be most affected.
