Skattstofninn og tekjuskatturinn hækka.

Those endings are the suffixed definite article in Icelandic. Instead of putting a separate word like the before the noun, Icelandic usually attaches definiteness to the end of the noun.

So:

• skattstofn = tax base
• skattstofninn = the tax base

and

• tekjuskattur = income tax
• tekjuskatturinn = the income tax

So the sentence is talking about the tax base and the income tax, not just tax base and income tax in general.

Because the base nouns are different, and Icelandic definite endings change depending on the noun’s form.

The indefinite forms are:

• skattstofn
• tekjuskattur

When made definite in the nominative singular:

• skattstofn → skattstofninn
• tekjuskattur → tekjuskatturinn

A noun ending in -ur often becomes -urinn when definite in this form. A noun without that -ur ending may simply take -inn.

So this is not random; it reflects normal noun inflection.

Because the subject is plural: there are two things doing the action:

• Skattstofninn
• og tekjuskatturinn

Together, they form a plural subject: the tax base and the income tax.

In the present tense:

• hann hækkar = it/he increases
• þeir/þau hækka = they increase

Since the subject is effectively they, the verb is hækka.

They are in the nominative case, because they are the subject of the sentence.

The sentence is structured like this:

• Skattstofninn og tekjuskatturinn = the subject
• hækka = the verb

So both nouns are in the form used for subjects.

It can be used in both kinds of meanings, depending on the sentence.

Here, hækka is used intransitively, meaning:

• go up
• increase
• rise

So here:

• Skattstofninn og tekjuskatturinn hækka = The tax base and the income tax increase / are increasing

But hækka can also be used transitively, meaning to raise something:

• Ríkisstjórnin hækkar skattana.
• The government raises the taxes.

So the meaning depends on whether there is a direct object.

Because Icelandic usually expresses the by attaching it to the noun itself.

So instead of saying something like:

• the tax base
• the income tax

with a separate article, Icelandic says:

• skattstofninn
• tekjuskatturinn

This is one of the first big differences English speakers notice.

Yes. Icelandic present tense often covers both meanings.

So:

• hækka can mean increase
• or are increasing

Which one sounds best in English depends on context.

Without more context, a translation like either of these is fine:

• The tax base and the income tax increase.
• The tax base and the income tax are increasing.

It is a compound noun, which is very common in Icelandic.

It is made from:

• tekju- = related to income
• skattur = tax

So tekjuskattur literally means something like income-tax.

Icelandic uses compounds very freely, much like German. English sometimes does too, but usually with spaces or hyphens.

This is also a compound noun:

• skatt- = tax
• stofn = base, stem, or foundation depending on context

So skattstofn means tax base.

Again, this is very typical Icelandic word-building: instead of using a long phrase, Icelandic often combines elements into one word.

No, this is a very straightforward Icelandic sentence.

It follows a basic pattern:

• subject + verb

So:

• Skattstofninn og tekjuskatturinn = subject
• hækka = verb

This is the normal order for a simple statement. Icelandic can vary word order more than English in some contexts, but this sentence is completely standard.