Tax on petrol and diesel cut to 0% to tackle rising costs in the Canary Islands
The Canary Islands Government has confirmed plans to cut fuel tax to 0% as part of a package of emergency measures aimed at easing the rising cost of living. The move, announced by Vice President Manuel Domínguez, forms part of a wider response to the economic impact of the ongoing international crisis, which has pushed up fuel and energy prices.
The key change is a reduction in IGIC, the Canary Islands’ version of VAT, on fuel from 1% to 0%. The aim is to lower prices at the pump and reduce pressure on households and businesses.
Alongside fuel, the government also plans to apply 0% tax to a number of everyday food items that were still taxed, including coffee, salt and butter.
Wider Support Measures
The tax cut is just one part of a broader support package worth nearly €30 million over the next 100 days.
Other measures include:
- Fuel tax rebates of up to 99% for transport workers and farmers
- Direct financial support for agriculture, fishing and industry
- Tax relief for small self-employed workers earning under €50,000 a year
The measures have been introduced in response to rising costs linked to global tensions, which have hit fuel prices and everyday expenses across the islands.
Because the Canary Islands has its own tax system, it cannot benefit directly from mainland Spain’s IVA reductions. As a result, local authorities have introduced their own measures to protect residents.
While the tax cut is designed to reduce costs, officials have said they will monitor whether the savings are passed on to consumers at petrol stations and in shops.
The measures are expected to come into force soon, with further support possible if the current economic situation continues.
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