Government of Lenin Moreno will raise tariff ceilings ‘temporarily’
Ecuadornews:
The President of the Republic, Lenin Moreno, presented last night what he called “Economic Program of Fiscal Stabilization and Productive Reactivation”. It is a plan of 14 measures and actions, within 4 thematic axes on reducing the fiscal deficit, restructuring the State, balancing the external sector and reactivating production.
The president ratified that taxes will not be raised, but said that five tax benefits will be “rationalized” – of more than 130 existing ones – that now favor, among others, the population with more than $ 100 thousand of annual net income. This would mean an additional $ 1,037 million between 2018 and 2021. Some $ 810 million are expected to be the product of tax and tariff control measures, he said.
He also assured that to protect the dollarization will be a temporary increase of tariff ceilings, within the limits allowed by the World Trade Organization (WTO) and trade agreements, without affecting raw materials, or capital goods, and without discrimination of origin .
The plan, which according to President Moreno, was drawn up based on dialogue with all sectors, including academics, workers, businessmen, authorities, politicians, proposes a tax remission.
The amnesty will be for 100% of interest, fines and surcharges. It will be aimed at micro, small and medium enterprises, with a term of up to two years, and will be extended to IESS debts and to local governments.
For large companies, the review is also proposed, but with a period of 90 days, as long as they desist from national and international legal actions. These measures will represent additional revenues of $ 1,600 million in 2018, and $ 1,300 million in the coming years.
As for fiscal austerity, the president has arranged the reduction of $ 1,000 million in the annual budgets of the Executive. “We will eliminate ministries, secretariats, vice ministries, undersecretaries and general coordination. We will reduce by half the number of advisers in each institution, “he said. He talked about lowering expenses in travel expenses and leases.
He also assured that until 2020, seven of the 22 public companies will be eliminated. He said that only those that are profitable, economically and socially, will be maintained, with the participation of private investments, if necessary, through the figure of joint ventures.
Regarding the investment incentive, Moreno informed that those that arrive between 2018 and 2019 will have a progressive benefit, particularly on income tax, the tax on the exit of foreign currency.
In the case of investments, which do not involve strategic areas and which commit to reinvesting 50% of their profits in Ecuador, they will not retain an additional dividend payment value that caused the payment of income tax in Ecuador and will be exempt from the payment of ISD after five years of permanence in the country.
Moreno announced that from today the ministers responsible for each axis will explain the details of the measures, and the corresponding legal reforms will be sent to the Assembly.
Reactions
‘The corrective, in the right direction’
Roberto Aspiazu, executive director of the Ecuadorian Business Committee, considered the plan positive. He stressed that the president has announced the reduction of $ 1,000 million in the public sector. It is a good start, he said, and considers that for the first time it is recognized that there has been a wrong model. Apart from the tariffs, he indicated that the corrective ones are going in the right direction.
‘The plan has more positive aspects’
Pablo Arosemena, president of the Chamber of Commerce of Guayaquil, highlighted the Government’s effort to address the clamor of the productive sectors and said that the economic plan has positive aspects. But he indicated that the issue of the elimination of the advance to the income tax is not clear. The negative, he said, the proposal to raise tariffs.
‘He has said what to do, but not how’
Marcos Lopez, of the Forum of Economy and Public Finances, said that the message of Moreno in general lines sounds good, especially the ‘what to do’ expressed on the four axes; However, he indicated that we will have to wait to see the ‘how’ later. For López, the president has tried to generate tranquility in the people. “This is like a news headline, you have to see its development.”
‘The agenda is totally neoliberal’
For Pablo Dávalos, from the Alternative and Heterodox Economy Forum, the economic plan is an agenda with a clear pro-business vision and implies a return of neoliberalism to the country. “We do not agree with the plan and in fact we will raise our disagreement. It will mean a brake on the economy and most likely the economy will not grow. ” (I)
‘The plan has more positive aspects’
Pablo Arosemena, president of the Chamber of Commerce of Guayaquil, highlighted the Government’s effort to address the clamor of the productive sectors and said that the economic plan has positive aspects. But he indicated that the issue of the elimination of the advance to the income tax is not clear. The negative, he said, the proposal to raise tariffs.
‘He has said what to do, but not how’
Marcos Lopez, of the Forum of Economy and Public Finances, said that the message of Moreno in general lines sounds good, especially the ‘what to do’ expressed on the four axes; However, he indicated that we will have to wait to see the ‘how’ later. For López, the president has tried to generate tranquility in the people. “This is like a news headline, you have to see its development.”
‘The agenda is totally neoliberal’
For Pablo Dávalos, from the Alternative and Heterodox Economy Forum, the economic plan is an agenda with a clear pro-business vision and implies a return of neoliberalism to the country. “We do not agree with the plan and in fact we will raise our disagreement. It will mean a brake on the economy and most likely the economy will not grow. ” (I)