The commercial sector of the Canary Islands, encompassing large, medium, and small businesses, has sent a letter to the Ministry of Finance of the Canary Islands Government requesting the elimination of the IGIC (General Indirect Canary Tax) exemption for online purchases made up to July 1st, valued at up to 150 euros. This request coincides with the entry into force of a three-euro tariff for all products purchased online from third countries, a measure that will particularly affect Chinese platforms like Temu or Shein.

Retailers consider this tax franchise, in place since 2016, a form of "unfair competition" as they are required to charge and declare IGIC to their customers. They argue that the application of the new three-euro tariff, which mandates a general customs declaration, removes the prior justification for maintaining the IGIC exemption on lower-value purchases. "If a declaration is now required for the 3 euros of the tariff, it can also be done for the IGIC on purchases under 150 euros," they state.

The tax franchise was originally established to avoid complex customs procedures that discouraged e-commerce in the islands. However, the commercial sector maintains that with the mandatory declaration for the tariff, the IGIC exemption loses its purpose. "Today, all shipments will be subject to declaration, and fully operational digital systems already exist," affirm sector sources.

Sources close to the commercial sector indicate that the Canary Islands Government must act to rectify this fiscal inequality. "From July 1st, the IGIC exemption system will no longer have justification. The Government has the tools, institutional backing, and a clear deadline," they add, emphasizing that the decision is a matter of "justice" and "equal conditions."

It is recalled that the European Union abolished the VAT tax exemption for low-value shipments across the mainland territory in 2021, due to issues of fraud and competition distortion. The Canary Islands, by maintaining the IGIC exemption, becomes the only European territory where low-value e-commerce shipments are not taxed, creating a "structural fiscal asymmetry" and a "hardly sustainable fiscal divergence."

Furthermore, unfair competition from non-EU platforms selling without tax burden in the islands floods the market, harming local businesses. The sector also highlights that in 2022, the Parliament of the Canary Islands unanimously approved a non-binding proposal urging the abolition of this exemption.

The commercial sector emphasizes the negative impact of this exemption on physical stores, which employ nearly 160,000 people and see their sales reduced. It is estimated that around 170,000 e-commerce shipments are distributed daily in the Canary Islands, half of them under 150 euros, entering "without paying taxes, without creating local employment, and with a direct and growing impact on Canarian brick-and-mortar retail."

Finally, they warn of the increase in emissions and waste derived from the massive distribution of non-EU parcels, and urge the Canary Islands Government to act to modify the fiscal system.