Canarian families will earn 200 euros more per month if the Government’s personal income tax reduction goes ahead

According to the data from the personal income tax presentation of previous campaigns and in a comparison with what happens with the workers of Ceuta and Melilla, If the bonus is achieved, the salary of Canarian workers would rise on average between 200 and 300 euros per month per family. Analyzing a specific case, that of a single person without children with an average salary of 30,000 euros gross per year, which amounts to an average salary of 1,700 euros per month in 14 payments, the bonus in which Canarias works would mean entering 2,000 euros a month, 300 more. If it were a couple with a child and an income of 30,000 euros – which represents 35% of the households on the islands, according to Istac data – the increase would be similar, between 250 and 300 euros per month, according to different tax sources. consulted.

The Commissioner of the Economic and Fiscal Regime of the Canary Islands (REF), José Ramón Barrera, and the tax advisors of the islands, represented by the general secretary of the Spanish Association of Tax Advisors (AEDAF), Orlando Luján, are convinced that the Canary Islands have the right to specific measures in personal income tax under the umbrella of their Canarian jurisdiction, the REF, which was granted in 1487 by the Catholic Monarchs to recognize the differences that existed between living on the islands and in the territory. peninsular. “We have the same personal income tax but it is not the same to live here as in Murcia,” says Barrera.

Luján expresses himself in the same sense: «We must claim it. It is a necessity in the Canary Islands. “It is not fair that we pay the same if things are more expensive.”

Three formulas under study

There are three formulas that the REF Commissioner is studying to achieve compliance with the Canary Islands and ensure that its citizens have the right to the income differential with respect to peninsular citizens.

The first of them and the one that now seems least likely is raise the personal and family minimums contemplated by personal income tax. Currently the same are set for all Spanish citizens but, as Luján explains, on the islands others of increased amounts should be established taking into account the “extra costs” that the Canary Islands have.

«The extra cost is a proven and real fact and must be compensated. “Living here is not the same as living there,” she says.

These subsistence minimums take into account the circumstances of each taxpayer: number of children, whether they have a disability, whether they have dependent minors or elderly dependents… and depending on all this, certain tax discounts are applied that are currently not available. They are taking into account the costs of residing in the Canary Islands.

This adjustment to personal income tax would be made on the tax base, that is, before applying the tax rate. After applying the tax, the other two formulas that are being studied would come into play and involve bonuses and deductions.

If we go into detail, one of them It involves a reduction in the personal income tax fee, in the style of Ceuta and Melilla and what has been done in La Palma, after the volcano. And the third and last would pass through specifically reduce the income obtained in the Canary Islands in the tax base. In this way, if a person earns 30,000 euros, an amount would be set that would be outside the taxation of personal income tax, for example 10,000 euros.

For now nothing has been decided. The REF Commissioner continues to maintain contacts with Madrid, which shows willingness to obtain approval from the Treasury for the Canary Islands income differential.

Orlando Luján, considers that In addition to these three formulas, the possibility must be opened to any citizen residing in the islands of providing the Reserve for Investments in the Canary Islands. (RIC) under the same terms and investment requirements as the self-employed and companies, so that any resident in the Canary Islands can reduce their tax burden in exchange for acquiring the commitment to invest, either directly by starting their businesses, or through participation in societies or even through collective investment mechanisms.

The bonus will take into account the income level

The differential that the Government of the Canary Islands wants to achieve in the personal income tax of the Canary Islands compared to the rest of the citizens of the peninsular territory (and that will mean more money in their pockets), It will be progressive and will be applied according to different income levels. This was indicated this week by the Commissioner of the REF, José Barrera, who considered the need to apply different differentials depending on the income and income of each taxpayer.

As he pointed out, the possibility of applying a model similar to that of the pharmaceutical co-payment, although with more links, is being considered, since the health measure contemplates “large jumps in income.” The pharmaceutical copayment provides for a certain level of aid for incomes of up to 18,000 euros, then from 18,000 to 100,000 and subsequently, for more than 100,000. «The jump is very big. At the second level you have to add some more links because if not there is a distortion,” he says.

Barrera highlights the importance that this differential is going to have in the Canarian economy. “If that money stays in the pockets of the Canary Islands and does not go to Madrid via personal income tax, it will mean greater consumption and a strain on companies, in addition to generating more indirect income via taxes such as the IGIC and the Corporate Tax,” he says. .

The REF Commissioner and the tax advisors hope to achieve the support of the citizens and all the political groups of the archipelago to fight for the implementation of some of these measures, since it would be very positive for the economy of the islands as a whole and of all its inhabitants.