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Santa Cruz de Tenerife has officially claimed the title of Spain’s cheapest capital when it comes to paying road tax. A new report by the drivers’ association Automovilistas Europeos Asociados (AEA) has revealed that motorists in the city pay far less than drivers in other parts of the country.

 

According to the study, the Impuesto sobre Vehículos de Tracción Mecánica (IVTM), better known as the circulation tax, costs just €34.08 a year in Santa Cruz for a standard medium-sized car of 11.99 fiscal horsepower. That makes it the lowest provincial capital rate in Spain.

 

The difference compared to other major cities is striking. In Las Palmas de Gran Canaria the same vehicle costs €56.57, in Madrid €59, in Barcelona €68.16 and in San Sebastián a hefty €87.93. The report points out that drivers in the Basque city are paying 158% more than those in Santa Cruz.

 

Santa Cruz mayor José Manuel Bermúdez welcomed the findings. “We have worked and will continue working so that our citizens have the lowest municipal taxes in Spain. This study shows that not only do we have one of the lowest tax rates, but we are also leading the way in fiscal competitiveness,” he said. He added that the city’s policy is aimed at attracting investment, encouraging entrepreneurship and easing the burden on residents.

 

The city’s councillor for finance, José Alberto Díaz-Estébanez, also stressed the impact of the figures. “These data reflect the work we have done on tax matters to reduce the economic burden on our neighbours,” he said, highlighting that Santa Cruz now offers significantly lighter taxation than many other Spanish capitals.

 

The AEA report places Santa Cruz alongside other low-tax municipalities such as Melilla, Ceuta, Zamora, Palencia, Badajoz, Cáceres and Jaén. The association notes that the circulation tax brings in around €4 billion each year for local councils, but the amounts vary widely because town halls have the power to raise the minimum charge by up to double. This freedom has created major differences across the country, leading some drivers to register their vehicles in cheaper cities like Santa Cruz to save money.

 

For Santa Cruz, the policy of keeping local taxes low has become part of its economic strategy. By reducing the cost of car ownership, the council hopes to put more money back into residents’ pockets while presenting itself as a model of efficient tax management.

 

At a time when costs are climbing elsewhere, the capital of Tenerife is standing out as something of a motorists’ paradise.

 

 

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