by

• Main Authors: English Text Only, Richard Herd
• Other Authors: The Pennsylvania State University CiteSeerX Archives
• Format: Text
• Language: English
• Subjects: Taxation; tax policy; Iceland
• Online Access: http://citeseerx.ist.psu.edu/viewdoc/summary?doi=10.1.1.309.2780; http://www.oecd.org/iceland/1891991.pdf

Document complet disponible sur OLIS dans son format d’origine Complete document available on OLIS in its original formatECO/WKP(2001)18 ABSTRACT/RÉSUMÉ This paper analyses the possibilities for reforming the Icelandic tax system. It puts the current tax structure in its historic context, showing that there has been a steady movement towards simplification. The personal income tax has a lower than average number of bands and, taxes capital income at an unusually low rate. Such a structure favours saving, especially since consumption taxes are particularly high. Nonetheless, there are a number of additional taxes on capital income that serve to raise the overall tax on assets, notably the tax on net wealth. The paper concludes that, if the current budget surplus persists over the medium-term, priority should be given to further reducing corporate taxes and the net wealth tax. At the same time, a number of discriminatory indirect taxes should be replaced by a uniform tax, and the diesel tax reformed. Consideration should also be given to the gradual introduction of a resource tax or to auctioning fishing quotas to help fund the other tax reductions. JEL classification: H2