Government to set IGIC at 0% for grocery basket items

Food and drink prices in the Canary Islands were 1.2 % higher than on the mainland.

The Vice President of the Canary Islands Government and Minister of Economy, Industry, Trade and Self‑Employment, Manuel Domínguez, announced on Tuesday during a parliamentary session that the IGIC (Canary Islands General Indirect Tax) will be set to 0 % for all items in the regional grocery basket.

“We have reached an agreement with the agents involved in the distribution chain and today we have a defined list of about 45 essential products, including dairy, fruits and vegetables, as well as protein sources such as fish and meat.”

Domínguez explained that each product has been examined “product by product, in a surgical manner, to see what tax rate applies and what aid it could receive.” He added:

“I can guarantee that any product that belongs to this basic grocery basket and currently carries IGIC will be brought to a zero rate. For those that do not, we will assess whether they can receive any form of government assistance.”

He made these statements while speaking to the full Parliament of the Canary Islands about the impact of rising basic‑goods prices and measures to ease the cost burden on the non‑capital islands. In this context, Domínguez noted that price behavior in the Canaries—especially on the smaller islands—depends on external factors, yet emphasized:

“In 2024 the prices of food and beverages in the Canary Islands were 1.2 % higher than on the mainland. If the reduced IGIC did not exist, that gap would be 6.8 %. This shows that Canary fiscal policy is not the problem, but part of the solution.”

Comparing the latest price data from January 2026 with January 2019 (pre‑pandemic), the Canary Islands’ CPI recorded the third‑lowest growth in Spain, 23.3 % versus a national average of 24.3 %.

The Vice President also recalled that the Canary Islands Government has taken several steps to “minimise” the inflationary pressure, including:

• A reduction in the Inheritance and Gift Tax.
• Fuel tax relief on the non‑capital islands.
• Cuts across all autonomous brackets of the regional income tax (IIRPF).
• A general reduction of the IGIC.
• Adjustments to the REA financial file, achieving over 98 % execution of the allocated budget.

In addition, the Government will establish, in the coming months, an Observatory to study price differences between islands, between municipalities, and with the mainland, in order to inform future policy decisions.

“The Canary Islands face a structural over‑cost problem due to their ultra‑peripheral status. Therefore, we must insist on a real update of the reference costs by the State. Freight transport costs have risen by around 30 %, while compensation mechanisms have not kept pace. This differential ultimately impacts families’ grocery baskets, especially on the non‑capital islands.”

These measures aim to alleviate the cost of living for Canary residents by removing the IGIC burden on essential food items and addressing the broader economic challenges linked to the archipelago’s geographic isolation.