Around midnight, the President sent an urgent economic bill to the National Assembly (Parliament) in which he proposed increasing the tax, a measure described by experts as neoliberal and impacting vulnerable sectors.
If the legislature approves the regulations, the increase in VAT by three percentage points would come into force from March 1, 2024 and thus all products and services would increase in value.
The project states that all natural and legal persons, public and private, national and foreign, resident and/or carrying out economic activity in Ecuador, are subject to the provisions of this law.
The executive order will raise $1.71 million in additional taxes this year.
What a regrettable and wrong decision by Noboa, expressed the economist Marco Flores on his social networks, where he explained that increasing the VAT in a dollar country follows the same neoliberal recipe of former presidents Lenín Moreno (2017-2021) and Guillermo Lasso (2021-2021) follows. 2023).
According to Flores, the same level of tax collection could have been achieved without penalizing lower-income populations or the poor.
The day before, the Ecuadorian president announced that he should take tough economic measures and ally with the National Assembly, “because a war costs and costs money,” but he ruled out a tax increase so as not to create “a greater burden” on the country Citizens in difficult times.”
However, the decision was different and, as lawyer and political analyst Mauro Andino had predicted, the poor are the main social and economic victims of an armed conflict. It is not fair that they now bear the costs of equipping the public armed forces.
Ecuador ended 2023 with a budget deficit of nearly $6 billion and the Economy Ministry had previously announced it would cut about $1 billion from public spending.
mem/avr