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The Ecuadorean government collected $ 638 million less than expected
Posted On 10 Aug 2016
Tax revenues in the first half of this year were $ 638.96 million less than what was expected, according to the publication of the Internal Revenue Service (IRS). The official goal was to raise $ 7,190.96 million from January to June this year. The amount obtained was $ 6.552 million.
Taxes that recorded a greatest fall with respect to the goal were the internal value added tax (VAT), the income tax (IR) and the outflow of foreign exchange (ISD), along with the VAT on imports.
The decline in the domestic VAT is 16%, despite the increase in that tax from 12% to 14% in force since June after the approval of the Solidarity Act which provides for contributions to cope with the April earthquake. According to figures from the IRS, this tax fell by $ 419.4 million compared what was expected.
Unfortunately, according to comments of the president of the Association of Economists of Pichincha Victor Hugo Alban- what was planned is happening: a higher VAT would contract purchases. The Government was advised on the inappropriate VAT increase. He also believes that the appreciation of the dollar and the devaluation of currencies in neighboring countries has led thousands of buyers to purchase products abroad. The last weekend 350,000 vehicles would have left Ecuador towards Ipiales and Pasto, he says. For Alban, this affects trade and corporate profits, and hence tax revenues.
