Government Announces 0% IGIC on 45 Consumer Products
The Vice‑President of the Canary Islands Government and Minister of Economy, Industry, Trade and Self‑Employed, Manuel Domínguez, announced in the Parliament that the regional executive will apply a 0 % IGIC rate to all products included in a basic‑basket list defined together with distribution‑chain agents.
According to Domínguez, the list comprises about 45 essential items, ranging from dairy, fruits and vegetables to protein sources such as fish and meat.
“We have examined each product surgically, reviewing its tax burden and the available aids. Every product that belongs to the basic‑basket will be taxed at zero; those that do not will be evaluated for possible government assistance,” he said in a post‑debate communiqué.
To implement the reduction, the Canary Islands Government must amend the regional tax law. The quickest route is a decree‑law issued by the executive, which would still need validation by the Parliament—similar to the IGIC cuts applied to medical supplies and masks during the pandemic.
IGIC Reduction and CPI in the Canary Islands
During the session, the Vice‑President highlighted the impact of rising basic‑goods prices and outlined measures to ease the cost burden on the non‑capital islands. He presented a comparative figure: in 2024, food and beverage prices in the Canary Islands were 1.2 % higher than on the mainland, but without the IGIC reduction the gap would have reached 6.8 %.
“This shows that Canary fiscal policy is not the problem, but part of the solution,” he asserted.
Domínguez also compared inflation trends: from January 2019 to January 2026, the Canary Islands’ CPI grew 23.3 %, the third‑lowest increase in Spain, versus a national average of 24.3 %. He listed the executive’s actions to “minimise” the inflationary pressure, including:
- Tax credit on the Inheritance and Gift Tax
- Fuel tax relief on the non‑capital islands
- Reduction of regional IRPF brackets
- IGIC cut to 0 % for the basic basket
- Adjustment of the REA financial framework (executed at over 98 %)
“A Structural Problem of Overcosts”
Domínguez announced the creation of a Price Observatory in the coming months to study price differentials among islands, municipalities, and with respect to the mainland and Europe. He described the Canary Islands’ high cost of living as a “structural problem” stemming from its ultra‑peripheral status.
“Transport costs have risen by around 30 %, while compensation mechanisms have not kept pace,” he explained.
PSOE Accuses the Government of “Inaction” on Grocery Prices
Socialist parliamentary group leader Nira Fierro criticised the regional government for “inaction” regarding the rising cost of the shopping basket, arguing that no concrete measures have been taken after “a year of studying solutions.”
“People also eat in non‑electoral years,” she declared during the debate.
In a response from the Ministry of Economy and Finance, Domínguez reiterated the government’s anti‑inflation actions (inheritance‑gift tax credit, fuel tax relief, IRPF bracket cuts, IGIC reduction, and REA financial adjustments) that have achieved over 98 % execution.
Fierro counter‑argued that the executive has acted more swiftly on other issues, while prioritising tax cuts for higher‑income earners. She also emphasized housing costs, noting that 60 %–70 % of some families’ salaries go to rent.
She reminded that 560,000 people in the Canary Islands live in social exclusion, called for the maintenance of tax deductions introduced by the previous administration to mitigate inflation, and urged the Vice‑President to show “speed and courage” in addressing the profits of large food suppliers.