The Canary Islands lose well-being and income due to “worn out” tax incentives

The Canary Islands lose well-being and income due to “worn out” tax incentives

«Far from converging with the rest of Spain and Europe, the Canary Islands are moving away from their levels of income and competitiveness. So, if we do not converge, why do we have a differentiated Economic and Fiscal Regime (REF)?the commissioner of the REF of the Canary Islands, José Ramón Barrera, asked himself yesterday during a breakfast-colloquium to analyze the Canarian jurisdiction, organized by the Association for the Progress of Management (APD) under the title ‘Modernization of the REF. More opportunities and employment in times of uncertainty.’

During the day, which was presented by the Minister of Economy and Vice President of the Government, Manuel Domínguezthe role that the REF and the fiscal instruments that form it (ZEC, RIC, DIC, Rebeca, IGIC…) have played for the development of the islands, the generation of activity and its economic growth since The Catholic Monarchs recognized the singularities of the archipelago.

However, At present, a review of the REF and its incentives is necessary, since the objectives with which it was created are no longer being met.. As Barrera indicated and the rest of the participants in the colloquium agreed -the general director of the Lopesan Hotel Division, José Ignacio Alba, and the general director of Inversiones Casticapital, Domingo Santana-, as well as APD counselor, Ana Suárez, and who acted as moderator of the event, the incentives have been “worn out” and today there are Spanish regions that, without REF and without the Canarian incentives, enjoy a position of strength and attraction of investment much higher than that of the Canary Islands .

The same happens if we analyze the well-being and income situation of Canarian citizens, which is increasingly moving away from the national and European average. “Canary Islands lose positions”, indicated the speakers while Alba (Lopesan) used a health metaphor to highlight the situation: «The REF has had an effect but it has been like ibuprofen for a migraine. It takes away the pain a little but you have to continue lying down and with your eyes closed because it doesn’t completely cure you,” she said.

He then referred to the per capita income of the Canary Islands and its evolution. «It has gone from 21,000 euros in 2006 to the current 17,500, while in Europe it has gone from 24,000 to 28,800 euros. Something has been done because we could be at 15,000 but it is clear that it is not enough,” he said.

The commissioner of the REF, José Barrera, pointed to other indicators in addition to income as clear signs that tax incentives must be reviewed. Among them, fiscal competitiveness. «They say that we have the best taxation in Europe and that we save and taxes because we have IGIC but we are not the most fiscally competitive. Andalusia, Murcia, Castilla y León and Murcia beat us. so you have to sit down and reflect», he stated. The fiscal pressure was another of the indicators that he put on the table: “Here we are not on the first line of departure either,” said Barrera. Alba delved into his criticism: «We are at 14.2% but in Navarra they are at 4.4% and in Madrid at 15.1%. Where is our super privilege? he asked himself. The same thing happens with the disposable income of households, which has fallen.

At the event, the need to bring the REF closer to the Canary Islands, who do not know their jurisdiction, was highlighted, and they advocated include bonuses for island workers in personal income tax. Measure that Domínguez advanced in a forum in CANARIAS7 a month ago.

Barrera acknowledged that there are “regulatory, legal and budgetary” limitations to get the Government of Spain to approve this measure but he expressed confidence in achieving it.

The vice president of the Government, Manuel Domínguez, was optimistic and considered that it was necessary to achieve this so that the Canaries have a higher per capita income and greater consumption capacity. “I would like to think that it will be achieved, even more so when we see that there is a part of Spain that has privileges and we only demand our rights,” said Manuel Domínguez..


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