Among the topics analyzed in debates on the Law of Productive Development are the attraction of investments, incentives, tax exemption, stability and fiscal balance. While the Executive analyzes the Law of Productive Development before publishing it in the Official Register, the regulation generates expectations and debates between analysts and producers.
The return of the Foreign Currency Exit Tax, the Income Tax, the attraction of investments and the tax remission are the most discussed topics. Among the points that are expected to be clarified is the calculation of the advance to Income Tax.
Patricio Alarcón, president of the Ecuadorian Business Committee, said that it should be defined “if the previous calculation is reverted or eliminated in its entirety”.
Daniel Legarda, executive president of the Ecuadorian Federation of Exporters (Fedexpor), explained that the sector has made observations in the Assembly related to the agility for the return of the Foreign Exchange Tax. They also requested the clarification of some benefits so that they are exposed in the law and do not lend themselves to particular interpretations.
“We hope that the regulations are ready as soon as possible so that the benefits that are there contemplated are executed. The country cannot waste time, “said Legarda.
The representative of the exporters pointed out that the investment will not necessarily be from new companies, but from existing ones. In this regard, he explained, we need to know how this new investment will be determined in relation to the total equity of the company. In addition, what portion of the profit will correspond to the new investment, which should be exempt from Income tax payment.
Despite these doubts, the sector sees the rule as positive. Eduardo Egas, executive president of the Corporation of Promotion of Exports and Investments, indicated that “this law is a step to create confidence in the investor”. Tax remission will benefit all sectors another issue questioned is the remission of interest, fines and surcharges.
The Minister of Economy and Finance, Richard Martínez, defended this point and on some occasions reiterated that this instrument not only benefits the large taxpayers, but also the young people. “Those who agreed to a scholarship returned to the country and do not have the capacity to obtain a job, they will also receive remission of interest and fines generated,” Martinez said in an interview in Ecuavisa.
He added that Ecuadorians who take advantage of the benefit and who have a low credit risk rating will be able to clean up their records and access financing more easily.
According to the director of the Internal Revenue Service, María Sol Andrade, the State will receive $ 774 million in tax remission until 2020. Andrade explained that the main beneficiaries would be the large taxpayers, although they represent 0.7% of beneficiaries
Pablo Guevara, partner of the tax consultant Fides Buró, stressed that the referral would apply to all taxpayers, with the only distinction that the large will have 90 days to meet their tax obligations, while the small can do so in two years.
The vice-president of the Chamber of Industries and Production of Quito, Pablo Zambrano, explained that the remission of interests is an instrument used worldwide with the objective of cleaning portfolios. “It is condoning only and exclusively interests, fines and surcharges,” he said.
Within this same issue, the former Minister of Foreign Trade, Juan Carlos Cassinelli, said that the law has a collection aspect. “It is evident that seeks to supply the State with resources, privileging those who have not been up to date on their obligations,” he said. He concluded that this aspect and the entire law must be accompanied by a joint public policy in all the ministries to work on the identified purposes. (I)