SANTA CRUZ DE TENERIFE, 6th Jul. (EUROPA PRESS) –
The revision of the Economic and Fiscal Regime (REF) of the Canary Islands, which gave birth to the discount for residents on the cost of journeys between islands and with the Peninsula, commemorates its 30th anniversary this Monday. Law 19/1994 was sanctioned on 6th July and came into effect two days later, resulting in the ‘new economic REF’, which constituted a pivotal moment in uniting a fragmented territory like the Canary Islands and compensating for the additional expenses of distance.
Among the numerous measures outlined in the legal document to enhance the prosperity of the Canary Islands, one of the most recognisable initiatives aimed to reduce the expense of transporting individuals and goods. At that time, the reduction in fares for residents was fixed at 10% for inter-island trips and 33% between the archipelago and the rest of the national territory. Presently, the REF discount has increased to 75%, except for sea journeys between islands, where residents only pay half of the ticket price.
Through fiscal and economic incentives, such as establishing special low-tax zones, diminishing the cost of transporting goods for agriculture and industry, and for energy and water, the reform of the charter concentrated on stimulating investment and broadening the island’s economy, thereby making the activities of local companies and freelance workers more competitive.
The new REF centred on the establishment of the Canary Islands Special Zone (ZEC) and the Canary Islands Investment Reserve (RIC). Undoubtedly, these were the most potent fiscal tools in existence at a European level, which have facilitated the diversification of the regional economy and enabled companies to expand and enhance competitiveness. The reform also defined the Free Trade Zones, boosted industrial activities with special incentives for producing tangible goods, and promoted maritime operations with significant deductions that led to the Special Regime for Ships and Shipping Companies of the Canary Islands (Rebeca).
The REF commissioner, José Ramón Barrera, affirmed that the charter has always been a dynamic tool, constantly evolving: “Throughout the five centuries of history of our charter, it has been necessary to defend and adapt it to each period, ensuring that it remains a mechanism for tax fairness, guaranteeing that those of us who are distinct receive distinctive treatment.”
Reflecting on the impact of the 1994 reform, Barrera recognised that “it has significantly contributed to economic growth and has driven us towards diversification in sectors crucial to our future, such as the audiovisual industry, renewable energy, recycling, and innovation.”
While its effect has been beneficial, the commissioner feels that the time has arrived to revise the REF once more, as “over the 30 years that have elapsed, the economy has radically transformed, with technology accelerating the changes more than ever.”
In light of this situation, Barrera has initiated an analysis process to introduce formulations that render “the charter a more adaptable instrument, which continues to have a positive influence on the lives of all Canarians.”
The reform carried out in 1994 became unavoidable due to Spain’s integration into the European Economic Community (EEC), as the new regulatory framework had rendered the jurisdiction established in 1972 and revised in 1991 virtually ineffective.
The explanatory statement of the Law, which is now marking its anniversary, made it clear that the modifications to the REF could not be merely superficial. The Canary Islands, having developed into an ultra-peripheral region of Europe, required “a substantial impetus platform” to secure a more competitive position.
