This new package of central government measures He followed the same path as the Gordo of the Christmas Lottery to reduce inflation and Barely touched the islands. A series of initiatives approved by the Cabinet yesterday to mitigate the economic and social consequences of the war in Ukraine are not meant to be big news for the Archipelago as they will have virtually no impact on the island families’ economy. Star size of the new package It will come into effect on 1 January. It will not even be placed in the archipelago: Six-month VAT reduction from 4% to 0% for all basic needs A shopping cart – from bread to eggs or milk, fruit and vegetables – and 10% to 5% oil and pasta is not counted in a region where there is no tax reduction margin, such as the Canary Islands. energy, fuel or food. IGIC, the ‘similar’ indirect tax to VAT in the Peninsula, is zero here for these sections.
What products are taxed on the islands?
Vice President and Finance Minister Román Rodríguez confirmed yesterday that the Canary Islands are unaffected as they differentiate taxation, after hearing from the mouth of Pedro Sánchez the fiscal measures taken by the Spanish Government to mitigate high inflation. “When the idea of reducing VAT on certain foods in the Peninsula is reinforced, all food in addition to gas, fuel or electricity has zero IGIC for 97% of consumers in the Canary Islands,” said the vice president. While in the peninsula region, 21% VAT is applied in general in the rest of Spain – despite reductions in certain subjects due to the pandemic – in the Canary Islands Economic and Financial Regime (REF) it has 7% in Canary Islands Indirect General Tax (IGIC). However, the Islands are ahead in basic needs and there is already zero tax on basic food products. One of the stellar proposals of Head of Government Pedro Sánchez proposing to reduce VAT on basic necessities from 4% to 0%, so it will have no effect in the Canary Islands because IGIC is no longer applied to these products as it currently is. Dairy, eggs, meat, fish or vegetables since 2012. According to Deputy Finance Minister Fermín Delgado, there has always been a point of tolerance in basic needs in the Canary Islands, given the remoteness and narrow-mindedness of the Archipelago.
Since when has zero rate been applied?
This IGIC types by-products are included in the Law No. 4/2012 dated 25 June. The zero rate applies as a general rule to essential and essential goods such as water for human food, livestock or irrigation, cheese, vegetables, oil, medicines, books, magazines, newspapers or passenger transport and air or sea transport. different Canary Islands. Cattle slaughter, canned meat production, textile, leather and shoe industry, paper and cardboard manufacturing, mining or vehicle repair and the general rate of 7% applies to other products. Then, Government measures in the Canary Islands Pedro Sanchez look back.
Could the prices be lowered even more then?
Román Rodríguez, Vice President and Secretary of the Treasury, He considers it “very difficult” to further reduce food prices in the Canary Islands “with zero tax”., “because that means tapping the market and finding a gap won’t be easy.” The Canary Islands are determined to take “selective, surgical and temporary” measures to address “this inflation phenomenon that needs to be channeled globally” and experts argue that it will “return substantially” next year.
How is the fuel and income tax deduction?
Rodríguez insists that special measures will be maintained for “fuel, gas and electricity for 96% of consumers”. The Canary Government confirms that it is actually continuing to reimburse the special fuel tax to 7,000 small companies, which translates into financial savings of 75 million. Don’t forget too Personal income tax relief for middle and low income earners will take effect on January 1. “There are worrisome levels of inflation, and every administration, especially the most vulnerable, is trying to balance the effects of inflation with measures that contain, if not resolve, the impact,” the vice president said.