Advance payment of income tax will be eliminated in 2019

Ecuadornews:

Until the end of April, the Government will deliver an urgent bill to the Assembly with reforms to implement the measures of the economic plan.

One of the most recurrent requests of the business sector in tax matters was finally addressed. As of 2019, the payment of the advance to the income tax will be without effect.

It is one of the 14 measures for productive reactivation within the economic program. It will have an impact of $ 140 million. It will have an effect on the income generated in 2019 and that would be canceled in 2020. In other words, in 2018, which will be paid in 2019, the advance still applies.

In order to make this and other measures effective, the Government will draft an urgent economic bill, with reforms to other legal bodies.

Its delivery to the National Assembly is scheduled for the end of April, said Andres Mideros, general secretary of the Presidency, in a television interview. The Legislature will have 30 days for the analysis.

According to the Internal Tax Regime Law, the advance is paid by the companies, individuals, organizations of the popular and solidary economy that meet the conditions of the microenterprises, the companies that have subscribed or sign contracts for exploration and exploitation of hydrocarbons.

In the Economic Reactivation Law, in effect since December 2017, it was established that for the calculation of the advance, taxpayers obliged to keep accounts will not consider costs and expenses, wages and salaries, bonuses (13th and 14th remuneration) or employer contributions to the Social Security.

The norm, strongly criticized, gave way to the return when the economic activity has been “significantly affected” and whenever it exceeds the tax caused.

But if the Internal Revenue Service (SRI) finds signs of fraud, a 200% surcharge will be imposed on the amount returned.

Richard Martínez, president of the Ecuadorian Business Committee (CCE), explained that this element is discretionary because it does not have clear parameters to determine if there is fraud.

The leader pointed out that the advance damages the liquidity of the businesses, especially the smallest, and constitutes a minimum tax that is not returned.

According to a study by the CCE, small businesses end up paying a rate even higher than 45%, when the normal rate is 22%. (I)

Source: https://www.eltelegrafo.com.ec/noticias/economia/4/anticipo-ir-sri-ecuador