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Price of Food in Iceland Increases

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Price of Food in Iceland Increases

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Photo: Wikipedia.

Changes to the value added tax (VAT) took effect yesterday, resulting in a higher price of food products, while the price of clothing, beauty products, medicine, alcohol, tobacco, furniture, phones, computers, cars and jewelries, among other products, will drop.

The lower VAT step will increase from 7 to 11 percent, while the general step will decrease from 25.5 to 24 percent. A special sugar tax and the general excise tax will be abolished, ruv.is reports.

The lowering of the general VAT step results in a 1.2 percent decrease in price. In addition to the aforementioned products, the price of plane tickets, insurances and electricity for other purposes than heating houses will drop.

Raising the lower VAT step will result in a 3.7 percent increase in price of food and drink, diapers and condoms, books, newspapers and magazines, restaurant and accommodation services, hot water and electricity for heating houses.

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