September has become a frantic month for proponents of the Tax on Imports and Deliveries of Goods (AIEM), the differentiated tax that protects local industry against the entry of foreign products into the Canary Islands. Before September 30, the Spanish government—with the People's Party (PP) and the Canary Islands Coalition as its main interlocutors—must submit to Brussels the new list of products that benefit from this mechanism.
Tensions are high: all stakeholders agree that the European Commission is preparing a complete "shaving" of the current tariff schedule. In practice, this means that a large portion of the items currently covered by differentiated tariffs could be excluded from the protection umbrella, precisely at a time when international tourism, concentrated in the south of Gran Canaria, is driving consumer demand.
A protection turned into a heritage business
On the political and economic front, no one disputes that the existence of a compensatory tax is key to the survival of small island industries in the face of foreign competition. However, the recent history of the AIEM also leaves a shadowy trail: in Las Palmas de Gran Canaria, numerous family business owners have opted to sell their businesses as soon as the tariff guaranteed sustained profits.
Thus, the AIEM has not always protected the productive fabric, but in many cases has served as an instrument to maximize dividends and facilitate the placement of legacy companies on the market, rather than to guarantee the real continuity of industrial activity.
Brussels prepares the cut
Community experts have repeatedly expressed skepticism toward a scheme that, in their view, has been used to protect business margins rather than jobs or competitiveness. In this context, the September review is anticipated as a turning point: fewer products on the list and more stringent justifications for each exemption.
The political balance
The PP and CC, with shared interests in maintaining the current model, face a difficult dilemma: defending in Brussels a fiscal tool that has increasingly vocal detractors in the Canary Islands, while large tourism operators push to lower the price of consumer goods in the archipelago.
In practice, the review of the AIEM will not only be a technical challenge with the European Commission, but also a political examination of the REF's coherence as an instrument of economic development. A dark September for the Aiemitas (Aiemites) could mark the future of differentiated taxation in the Islands.
