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Iceland's high court upholds 76% tax on imported french fries

Iceland's Supreme Court upholds 76% tax on imported french fries (Courtesy: RÚV)

The highest court in Iceland has upheld a ruling that a 76% duty charged on imported French Fries is not unconstitutional.

Two Icelandic companies involved in the import of foods, Innnes (represents a.o. Aviko in Iceland) and Hagar(a grocery and distribution chain) had disputed the duties and were appealing the September 2016 ruling of the district court, which had also deemed the duties to be in line with the constitution.

Both companies were seeking repayment from the Icelandic government for French Fry duties paid between 2010 and 2014. Innes was seeking ISK 30 million [USD 293,000] in restitution, while Hagar was asking for repayment of ISK 71 million [USD 692,900]. Both companies felt that the duty was motivated by protectionism surrounding Icelandic agriculture.

The companies also argued that the tariff shouldn't be any higher than the 46% levied on potatoes imported from Canada and Peru.

The court disagreed with this argument, however, and ruled that Icelandic parliament has the right to set customs duties.

Furthermore, the court pointed out that it doesn't have the power to set taxes, a responsibility which falls solely on the government and its officials.

To add insult to injury, the companies were ordered to pay ISK 700.000 (about USD 7000) as a contribution to the government's legal costs.
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