Retailers and consumers are feeling the pinch. | Photo: Majorca Daily Bulletin reporter
Humphrey CarterPalma14/10/2026 15:24
The UGT Baleares union has stated that reducing VAT on essential goods could be a measure to help mitigate the effects of inflation in the Balearics, where inflation rose by 5.1 per cent year-on-year in September.
Speaking to the press, a union spokesperson explained that this measure had already been discussed during the war in Ukraine and that, although any reduction in the tax burden could “undermine public policies”, in this specific case they would not view it unfavourably.
Whilst he pointed out that VAT is a matter for the central government, he noted that pressure could be exerted from the Balearic Islands to ensure this is implemented. The Regional Minister for the Economy, Antoni Costa, held several meetings on Wednesday with social and economic stakeholders to address the situation arising from the rise in fuel costs due to the war in Iran, with the aim of listening to proposals and analysing the effectiveness of the measures already implemented.
Following the meeting, UGT boss Pedro Homar explained that he had raised the need for the Balearics to “have a strategic policy on energy sovereignty” and for “renewable energy policies” to be promoted in order to “stop relying so heavily on fuel”.
Antonio Alcover, a representative of the Association of Economists, stated that the meeting had addressed a “very wide range of measures”, such as reducing VAT on essential goods. “The scope for action by an autonomous community is limited, but it is true that the Government has greater scope, though this is also constrained by Europe,” he explained.
Before the start of the second meeting, the president of the Distributors’ Association, Tomeu Servera, criticised delays in the regional government’s provision of aid to alleviate the crisis resulting from the war in Iran.
Servera hopes the regional minister will understand that there is no point in “publicising aid and more aid and taking more photos” if it then takes “all these months to arrive”. He assured that, whilst this aid “won’t solve everything”, it will prevent price rises from having to be applied to products.
The president of the Balearic Confederation of Commerce and vice-president of Pimeco, Mateu Conill, stated before the meeting with the regional government that “the assessment” of the situation is poor, given that “less money is coming in than is going out”.
Among the measures they are hoping for, he emphasised that it would be beneficial to have aid for island status, particularly double the amount for Menorca and Ibiza, and triple the amount for Formentera.