Útsvar

Útsvar is a term used in Iceland and some other Nordic countries to refer to local income tax. It is a percentage of an individual's income that is levied by municipalities. The rate of útsvar varies between different municipalities, allowing local governments to set their own tax levels to fund local services and infrastructure. This revenue is crucial for municipalities to provide essential services such as schools, healthcare, roads, and social welfare programs. The útsvar is typically collected alongside national income tax and is a significant source of funding for local governance. The specific percentage is determined annually by each municipal council. Residents of a particular municipality pay útsvar to that municipality.