canary islands government igic zero rate basic products

Canary Government’s Zero-Rated “Basic Basket” Under Scrutiny

Government Announces Zero Tax on 45 Essential Products

The Canary Islands Government has reached an agreement with distribution chain agents and has now defined a list of some 45 essential products. The list takes into account dairy, fruit and vegetables, as well as proteins like fish and meat. This was the announcement made by the Vice-President of the Canaries, Manuel Domínguez, on 24 February and communicated to the media via a press release. However, this very week he admitted in an interview that 40 of these products already have this reduction applied. “Perhaps we shouldn’t have announced it,” said Domínguez on Cadena Ser radio.

What Does the Existing Law Already Cover?

His government published a decree in the Official Bulletin of the Canary Islands on 20 October 2025 (long before the conflict between the United States and Israel against Iran erupted). This decree lists numerous products with a zero tax rate, including: bread, specific bread for coeliacs, water, flour, gofio (toasted cereal flour), milk, cheese, eggs, fruit, vegetables, greens, pulses, natural tubers, cereals, meats, and fish. That decree also includes olive oil, seed oil and olive pomace oil, various types of pasta such as spaghetti, macaroni, and tagliatelle, among others, medicines for human use as well as those for veterinary use. The decree also lists petroleum, sanitary towels, nappies, and electrical energy, among other items.

What is Actually New in This Announcement?

With such an extensive list already in place, what is the Canary Islands Government actually selling as new? In the February announcement, Domínguez stressed that a product-by-product, surgical analysis was being carried out to see what type of tax they have and what aid they can access. “I can guarantee,” he stated, “that every product in that basic shopping basket with IGIC, we will take to zero rate, and those that do not have it, we will see if they can receive some type of aid from the Government.” The truth is that only three products will be added as novelties to that list: salt, coffee, and butter. There are two others in doubt as the Government of the Canary Islands awaits what the Public Health reports determine: sugar and biscuits.

Political Criticism and Accusations of “Propaganda”

While it is true that the list of zero-rated products has been expanded over the years, if we look at the 2012 decree on IGIC, basic products like water, milk, eggs, meat, fish, fruit, vegetables, or pulses were already included. In the last legislative term, due to COVID and the La Palma volcano, different decrees related to IGIC were carried out. The then Vice-President of the Canaries and Minister of Finance, Román Rodríguez (NC), emphasised that practically the entire shopping basket in the Canaries is exempt from the Canary Islands General Indirect Tax (IGIC).

Precisely, Nueva Canarias has been one of the formations most critical of the Canary Islands Government’s anti-crisis measures decree. Its general secretary, Luis Campos, has pointed out that it is, simply, “an exercise of propaganda with sleight-of-hand figures and a social void that is embarrassing.” In Campos’s opinion, it should include measures for the most vulnerable families and he reproaches the government for not having developed the supplements to the Canarian Citizen’s Income. He also criticises the inclusion of measures that are no longer new, such as the zero IGIC rate on products that already had it or the extension of the special scheme for small businesses (Repep) up to €50,000.

For its part, the PSOE of the Canary Islands described in a statement as “absolutely false” the claim that measures announced by the Government of Spain have no effect in the Canaries. These include direct aid to shipping companies so that the increase in fuel prices does not make inter-island tickets more expensive, and increased agility in paying fuel aid to farmers, among other actions. Furthermore, the parliamentary spokesperson Sebastián Franquis demanded concrete initiatives aimed at protecting the most vulnerable groups, such as strengthening the supplements to the citizen’s income or implementing aid for contributory pensions.

A History of Tax Promises and Retreats

This is not the first time the Canary Islands Government has become entangled with IGIC. During the election campaign, both Coalición Canaria and the PP insisted on the need to lower taxes. Specifically, both formations promised to reduce the rate from 7% to 5% and enshrined this in an agreement. Shortly after coming to power, they have used fiscal uncertainty as a shield not to apply the measure. Furthermore, it was recently MP Cristina Valido who asked the state government to lower IGIC to mitigate in the islands the rise in energy and logistical costs derived from the war.

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