The benefit represents more than $ 300 million for the sector. The refund of the tax on the exit of foreign currency was already approved in the Law of Economic Reactivation.
The government will eliminate the tax credit on the exit of foreign currency and instead will reimburse exporters monthly the value paid for the tax generated on the importation of raw materials, inputs and capital goods.
The measure will be effective in the course of this week, when the Tax Policy Committee issues a resolution and it is published in the Official Registry, informed Leonardo Orlando, general director of the Internal Revenue Service.
Five tax benefits will be eliminated as part of the Economic Program, the tax credit of the tax on the exit of foreign currency is one of them, and in this way the government calculates to collect $ 330 million annually from 2020. The announcement disturbs the productive sectors.
At the discretion of Daniel Legarda, president of the Ecuadorian Federation of Exporters (Fedexpor), the tax credit must be maintained and the refund added as an option. The idea is to increase incentives, that the exporter has the possibility to choose between what is best for him, explained Legarda while waiting for the authorities to disseminate the official text.
The Tax Reform Act currently stipulates that the tax credit will be applied to the payment of income tax for the last five fiscal years, the payments made for the tax on the exit of foreign currency in the importation of raw materials, inputs and capital goods with the purpose of which they are incorporated in productive process.
All the tariff items used by the exporters, and that today enjoy a tax credit, will benefit. The Tax Policy Committee has already chosen the first assets on which the refund will apply. They consist of soy cake, machinery for production and agricultural inputs.
Orlando did not offer specific details regarding the operation of the measure. The monthly refund of the tax on the exit of foreign currency is not new. It was approved in December 2017 with the criticized Law of Economic Reactivation, first legislative project of Lenin Moreno.
There it was established that the refund will be for regular exporters and will have a similar scheme to the refund of the value added tax (VAT). Around 356 companies would benefit, according to the Internal Revenue Service. Five months have passed since the law came into force and until now there is no corresponding regulation.
For this reason the return has not materialized, observed Legarda. Regular exporter is one that has at least 25% of exports over total sales. “If we take into account only this criterion for the return, more than 1,000 companies that do not necessarily reach 25% are left out.
The products that are most affected are the non-traditional products, manufactures, new segments or that are exporting a few years, “warned the businessman. For the sector, the tax credit of the tax on the exit of foreign currency represents more than $ 300 million, whether the imports are made directly by the exporters or through an importer.
On Friday, the Minister of Industries and Productivity, Eva García, held a meeting with businessmen in Guayaquil, where she said that together with the Ministry of Finance, alternatives to “all those resources that are necessary for the Treasury” are being analyzed. García assured that the dialogue with the private sector is permanent and they are expected to receive the proposals of the guilds. (I)