President Daniel Noboa sent to the National Assembly an urgent economic bill to confront the internal armed conflict and the social and economic crisis.
Offices of the Internal Revenue Service (SRI) in Cuenca.
President Daniel Noboa sent to the National Assembly a new urgent economic bill to confront the internal armed conflict. This proposes increasing VAT from 12% to 15%.
The urgent economic project, called the Organic Law to confront the internal armed conflict, the social and economic crisis, entered the National Assembly on the night of Thursday, January 11.
Being an urgent economic bill, the National Assembly has 30 days to deal with it.
President Daniel Noboa had already anticipated that he would take economic measures to confront the internal armed conflict and said he was preparing several urgent economic bills.
“We must be aligned, because a war costs and costs money , so we must take important actions and measures,” he expressed on Thursday, in an interview with FM Mundo.
What does the bill say?
This new urgent economic bill has four articles, two general provisions and one reform provision.
The single reform provision proposes an increase in the Value Added Tax rate, which is currently 12%.
The increase in the VAT rate is not proposed as a temporary measure.
The first general provision establishes that the resources collected from the increase in the VAT rate will not be considered as the object of any preallocation.
Another provision establishes that the tax deductions and exemptions applicable to the Value Added Tax will remain in force.
The provisions of this law are applicable to the entire national territory, details article 2.
The Communication Secretariat added that this measure does not include products in the basic basket, basic services, medicines, passenger and cargo transportation, health, education, housing rental, hygiene products, among others.
Extra collection of USD 1,306 million annually
“The increase in tax collection would provide the necessary resources to strengthen security forces , improve prison infrastructure and develop long-term strategies,” says the document sent by Noboa to the Assembly.
According to the report sent by the Internal Revenue Service (SRI), “a positive impact of USD 1,306 million annually is estimated ” with the increase in the VAT rate.
In the document, the Executive explains that the law is expected to be in force from March 1, so the additional collection in 2024 would amount to 1,071 million.
Learn about the Urgent Economic Law project to confront the internal armed conflict and the social and economic crisis:
