Law on environmental and natural resources taxes

The Iceland carbon tax (official name: Kolefnisgjald á kolefni af jarðefnauppruna) is part of the Environmental and Resource tax. The tax was introduced as part of the government's tax reform on vehicles and fuels to encourage the use of environment-friendly vehicles, save energy, reduce GHG emissions and increase the use of domestic energy sources. The carbon tax is levied on liquid and gaseous fossil fuel. The tax rate is indexed each year by expected inflation.

Source: World Bank Carbon Pricing Dashboard

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