24/04/2012 Canary Islands/ Lanzarote (KMC) - The CC-PSOE coalition have approved a draft law (Ley de Medidas Administrativas y de Modificación de Normas Tributarias) which paves the way for a 2% increase in tax here from the end of June 2012 to the year 2014. The Canarian Government hopes that the move to increase IGIC from 5% to 7% will increase their revenue by 118 million euros, and Javier González Ortiz, the regional director of Economy, Finance and Security said that the only alternative was that vital services such as hospitals, schools and social centres would have to be closed.
If the law is passed by parliament, the cost of fuel will increase for the first time since 2004. Those with Diesel cars will see the highest rise, with an increase of 10 cent per litre. Unleaded (98.5) will rise by 5.5 cents per litre and unleaded (95) will rise by 5 cents per litre.Income taxes will also be raised, with individuals who earn over €53,000 a year paying 22.8% instead of the present rate of 21.5%. The 99.9% inheritance tax discount that Canary Island residents currently receive will be scrapped.