What motivates a Government to triple VAT on tourism?

This morning the following story from eTurbo News caught my attention: “Iceland tourism braces for huge VAT increase.”  VAT is going from 7% to a whopping 25.5%, although a decrease in tourism taxation in 2007 resulted in a 2008 increase of 6% in tourism receipts. The story does not explain the Government’s rationale for proposing […]