Record-Breaking Tax Revenue in the Canaries
State tax collection in the Canary Islands, primarily from Personal Income Tax (IRPF), has reached historic highs between January and October. Revenue has been on an upward trajectory since 2022, hitting a new record this year with collections surpassing €4 billion—specifically €4,090.2 million, according to statistics from the national Tax Agency.
Leading the National Growth
This is not only an unprecedented sum but also places the Canary Islands as the third-highest performing autonomous community in Spain for revenue growth compared to the same period in 2024, with a rise of 12.3%. Only the Valencian Community (up 16.5%) and Murcia (up 12.5%) recorded higher increases. The national average growth stands at 9.3%.
Drivers Behind the Surge
The widespread increase in state coffers is attributed to two fundamental reasons: the tax hikes and changes introduced this year, and the rise in Social Security affiliations coupled with a fall in unemployment, meaning more people are working and contributing. Salary increases agreed in recent years have also pushed many earners into higher tax brackets, resulting in higher gross pay but also a larger tax bill.
The so-called deflation of IRPF—adjusting tax brackets so inflation and taxes do not erode workers’ purchasing power—has not occurred at the state level, although autonomous communities like the Canary Islands have implemented it for their regional portion.
A Tale of Two Provinces
The Tax Agency data reveals an uneven performance between the two Canary Island provinces, with stronger growth in Las Palmas (encompassing Gran Canaria, Lanzarote, and Fuerteventura) than in Santa Cruz de Tenerife (covering Tenerife, La Palma, La Gomera, and El Hierro).
In October, revenue in the eastern province reached €462.5 million, an 11.9% increase from the same month last year. In contrast, the western province saw a slight dip of 0.2%, with income remaining virtually unchanged month-on-month at €295.1 million compared to €295.7 million.
In the cumulative period from January to October, revenue in Las Palmas hit €2.564 billion—a 14.9% increase and €1 billion more than in Santa Cruz de Tenerife, which accumulated €1.5262 billion, an 8.2% rise.
Regional and National Context
Regionally, state coffers took in €757.7 million in October, a 6.8% increase. Nationally, tax revenue totalled €52.823 billion for the month, a 5.9% rise compared to October 2024. This growth resulted from a 6.1% increase in gross income and a 7.6% rise in refunds issued.
With October’s figures, cumulative revenue for the year grew by 9.3% compared to the January-October period last year. Gross income grew by 9.6%, while refunds issued increased by 11.1%. These figures place the Canary Islands three percentage points above the national average for autonomous communities.
Impact of Tax Reforms
The monthly revenue report from the State’s General Intervention Office shows that, up to October, the Treasury has collected an extra €6.575 billion due to the tax hikes and changes introduced this year. These include the failure to deflate IRPF at the state level, increases in VAT rates, and modifications to Corporation Tax.
This increased fiscal pressure has meant that the rise in State Administration tax revenue is outpacing the average increase for taxes within the Canary Islands’ own financing block, such as the IGIC (Canary Islands General Indirect Tax). The latest data from the Canary Islands Tax Agency (ATC), which runs up to September, shows a 7.47% increase, with net revenue of €1.830 billion. Total income from the region’s own, transferred, and REF (Canary Islands Economic and Fiscal Regime) taxes from January to September reached €2.878 billion, a 6.4% rise, compared to the 12.3% increase seen in state taxes.
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