SANTA CRUZ DE TENERIFE, March 16. (EUROPE PRESS) –
The Vice President of the Government of the Canary Islands and Minister of the Treasury, Román Rodríguez, said this Wednesday that market intervention “is the only way” to control energy prices (electricity and fuel).
In his opinion, this intervention must take the form of measures such as decoupling gas from the calculation of the electricity bill, establishing a ceiling for energy prices or even taxing the large multinational electricity producers.
On the other hand, it maintains that a reduction in the taxes levied on electricity and fuel in the Canary Islands would have no impact on the final price that the consumer pays for such products and would have repercussions on the income that the Autonomous Community then allocates to care for the health, education and social services, and aid to productive sectors.
The vice president pointed out that the taxation of these products is very low or non-existent in the Canary Islands and that, in any case, the problem is determined by the price of raw materials and speculative tactics, not by the amount of the tax.
“Therefore, we must focus on the root of the problem instead of making irresponsible decisions that would only undermine the capacity of the public administration to provide essential public services and provide coverage to those who are now experiencing the worst due to of inflation,” he commented.
The vice president explained that, consequently, it is necessary to go to the origin of the problem and in that direction it is the Government of Spain and the European Union who have the capacity to adopt measures that cushion the escalation of prices, which is why the European Council considers it “decisive” of the next days 24 and 25 in which decisions will be made to combat inflation that have to go through the intervention of the markets and the commitment to other markets and renewable energies.
Simultaneously, he indicated that the Government of Spain is designing a ‘Response Plan’ that will be approved in the Council of Ministers on the 29th and in which actions are foreseen such as an income pact that limits business profits and salaries, in addition to fiscal and economic measures.
FUELS AT 0% IGIC
Rodríguez specified that in the Canary Islands 26.5 cents of euros per liter of gasoline are paid in the special fuel tax – when on the Peninsula it is 47.4 cents – and on the Peninsula 21% VAT is added when in the Canary Islands there is a type 0 of the IGIC.
Another peculiarity of the Canarian market is that the Government returns 68% of that amount that is charged for the tax to professional carriers and farmers.
In any case, the vice president was in favor of maintaining the fiscal differential between the Canary Islands and the Peninsula in the event that the Government of Spain decides to lower its Special Tax on Hydrocarbons.
In relation to electricity, the Canary Islands apply the 0 IGIC rate to those consumers who have contracted less than 10 kilowatts, which is 96% of the users, and for the rest, the rate is 3%.
In this regard, Rodríguez recalled that there was a 21% VAT on the Peninsula and it dropped to 10%, “which has not helped to contain the escalation in electricity prices, which has another origin, and yes to fatten the income statement of the electricity companies”.
The vice-president insisted that the Government of the Canary Islands will help the sectors most affected by these price rises, but not by lowering taxes, “which always end up benefiting the wealthy and undermining the Administration’s capacity to attend to the vulnerable”, but with specific measures.
BALANCE OF ACCOUNTS
The consequences of the rise in prices in recent months also affect public administrations, so that in the case of the Autonomous Community of the Canary Islands, the Government will already have to make a budget adjustment of 400 million euros to face payments to its different providers, Rodríguez said.
This circumstance invalidates, as “irresponsible and demagogic”, any proposal for a tax reduction, since it would further cut public revenue, “which is essential to meet, precisely, the needs of those most affected by inflation.”
