Only sixty-five kilometres separate the two municipalities that highlight the economic disparity evident in Tenerife. El Rosario, with an average gross income of 35,118 euros per person, boasts the highest earnings on the Island and ranks second in the Canary Islands, whilst El Tanque, at 18,874 euros, sits at the lowest end of the island and regional scale, alongside the municipality of Garafía.
This information is provided by the Personal Income Tax Filers Statistics released by the Tax Agency, utilising data from 2022 (the latest update), which shows that the average income in El Rosario nearly doubles that of El Tanque, underscoring significant territorial inequality.
Indeed, the ten municipalities in Tenerife with the highest average income are located near the two major population and economic centres on the Island, Santa Cruz and La Laguna. Predictably, they dominate the top positions in this ranking, with Santa Cruz as the capital of Tenerife and La Laguna in eighth place. This list also includes Tegueste, Candelaria, Tacoronte, Santa Úrsula, El Sauzal, and Arafo.
According to José Miguel González, director of Corporación 5 Consulting, who spoke to this publication, the choice of residence largely depends on employment location. However, the data suggests that people do not necessarily reside in the municipality where they are employed.
It is noteworthy that southern municipalities such as Adeje, Arona, or Guía de Isora are not represented among the top places in this ranking for average income of personal income tax filers, despite being significant hubs of economic activity.
Contrarily, these areas do not tend to attract high-income residents who work within them. For instance, Arona ranks 21st in the island classification and 56th in the Canary Islands; Guía de Isora sits at 70th in the Archipelago, while Adeje performs slightly better, claiming the eleventh position for average income in Tenerife, but ranks 30th overall in the region.
At the lower end, northern municipalities in Tenerife are particularly noteworthy, with average incomes that either fail to reach or just surpass 20,000 euros per person. This group includes El Tanque, along with Los Silos, Icod de Los Vinos, La Victoria, Buenavista del Norte, and La Guancha.
José Miguel González emphasizes the necessity of implementing measures to alleviate this disparity on the Island and help align the Archipelago with the national average.
Beyond establishing tax incentives for companies to set up in municipalities deemed less attractive, he considers it crucial to ensure efficient connectivity to enhance mobility, greater administrative efficiency to cut through bureaucratic obstacles, and, simultaneously, a robust housing policy that offers sufficient affordable housing on the market.
The data not only underscore the inequality present within the Canary Islands. They also highlight the growing gap between the Archipelago and the Spanish average, from which they have drifted away in recent years, now almost 4,000 euros below. Within the Canary Islands, only Santa Brígida (Gran Canaria), with a gross average income of 40,713 euros per person, El Rosario (35,118 euros), Teguise (31,100 euros), and Las Palmas de Gran Canaria (30,383 euros) surpass the national average. Santa Cruz de Tenerife, despite being second in average income on the Island, is still below the national average, coming in fifth regionally.
José Miguel González recalls that, although “we Canarians are not poorer than we were 25 years ago, we are drifting away from the wealth progression experienced in other regions of Spain and Europe. This gap widens due to multiple factors, including low productivity, which leads to low wages. This presents a significant challenge we must confront,” he concludes.
taxes to “balance the island metabolism”
“You can take people to where the jobs are, but you can also take jobs to where the people are.” With this seemingly simple notion, José Miguel González encapsulates potential strategies to bridge the economic gap between municipalities, foster collective development, and “balance the island metabolism.”
He believes that one viable approach would be to offer tax incentives designed to make it appealing for companies to establish themselves in previously overlooked areas. “This could be achieved through municipal tax concessions or even other methods, such as personal income tax reductions, akin to what has been adopted in La Palma due to the unique circumstances brought about by the volcano,” a strategy that could be harnessed to bolster social and economic progress in struggling municipalities.
