The government’s revenue projections from the newly implemented tax on nicotine pads and e-liquids have taken a surprising turn, with estimates now falling short by 1.9 billion ISK. Initially, officials anticipated that these fees would contribute around six billion ISK to the national treasury. However, recent figures suggest that actual income will hover closer to four billion ISK, as revealed in a memorandum from the Ministry of Finance.
This shortfall stems from a notable discrepancy between reported consumption trends and import levels. In simple terms, while a significant number of individuals have indicated increased nicotine use in surveys, imports have not mirrored this uptick. Notably, about one-third of men aged 18 to 35 report using nicotine patches daily, alongside 21% of women in the same age group.
The Ministry is actively investigating this disconnect. In the draft budget proposal for the coming year, the projected income from the tax had initially been set at 4.6 billion ISK; however, this has now been revised downward, with expectations now resting at 4.2 billion ISK.
Interestingly, recent data from the National Health Service’s October survey suggests a slight decline in nicotine usage, indicating a shift in consumption patterns compared to the previous year.
