Companies in the Canary Islands fared worse in the first year of the Covid pandemic than in Spain as a whole, as the proportion of those that closed was three times higher than in the rest of the country, as highlighted by the CEOE of Tenerife based on data from the central directory of companies of the National Institute of Statistics.
These figures reveal that in Spain a total of 37,858 active companies were lost in 2020, which in relative terms translates into a decrease of 1.11%, while in the Canary Islands 147,999 companies survived out of the 152,756 that were recorded on January 1, 2020. This represents a decrease of 3.11%.
If the analysis period goes back to January 1, 2019 and extends until January 1, 2021, the evolution of the number of active companies in Spain shows a positive balance, while the archipelago experiences a decrease of 2.41%.
In the comparison between January 2020 and the beginning of 2021, at the national level the loss of companies occurred in all categories classified by number of employees, except in those with between 200 and 249, as well as between one and two. In the Canary Islands, the same occurred in the last stratum, with an increase of 938 companies with one or two employees.
For its part, the CEOE of Tenerife indicates that the dynamics of the business fabric since the outbreak of the pandemic evidence the need to boost economic activity and insists that "investment is the key for the Spanish economy to recover, especially when the purchase of bonds by the European Central Bank has concluded" and considers it "convenient" for the authorities to commit to a tax reform that convinces investors that Spain will reduce its deficit.
To this end, it argues that it is essential to implement measures that focus on a tax system designed on the capacity and proportionality inherent in the economy and reduce inefficient spending. "This is the necessary formula to generate economic growth and, in turn, boost the business fabric as a source of job creation," adds the CEOE of Tenerife.
With regard to the Canary Islands, it warns that the restrictions linked to Covid particularly affected the tourism sector and, with it, the main economic engine of the islands, and, to reverse this situation, it calls for maintaining the advantageous tax particularities of the islands and for decentralization.
"Tax competition not only allows the Canary Islands to adjust the design of their taxes to the specificities of their territory according to their economic, business and social structure, but also favors efficiency and competitiveness between regions," he stresses.
In short, the CEOE concludes that "the loss of companies, with the consequent destruction of employment, evidence the need for a reform that prioritizes efficiency and a tax system designed on the capacity and proportionality inherent in the economy."
