Several ways of financing an increase of the BDH

The tax reform bill that allows an increase of the Human Development Bonus (BDH for its Spanish acronym) from $ 35 to $ 50 a month has been approved, but the details of the financing remain in uncertainty until next Saturday.

However, it is thought that the Government of Rafael Correa will finance the BDH increase with profits of private banking.

According to experts, there are several other ways to increase the Bonus funding:

• To apply reduction policies in the purchase of fuel derivatives (totaling more than $ 4,000 million annually). With campaigns promoting lower fuel consumption, the Government would save 10% of resources to increase the bond. (Xavier Andrade, Analyst)
• The payment to shareholders of closed banking. The Government has done nothing to charge for $ 3,400 million to the bankers. These resources could serve to fund the benefit. (Alfredo Vergara, former Superintendent of Banks)
• Decrease in the purchase of goods (cars, supplies) and services (consulting, advertising) for the public system. With minimal contraction, the bond would be financed. Only this year, around $ 1,510 million will be spent on these items. (Vanessa Lara, Economist)
• If public sector vehicles cease to consume a liter of gasoline per month, $ 250 million a year could be saved. Those resources can be used to increase the BDH. “It’s a matter of management.” (Victor Hugo Alban, president of the Association of Economists of Pichincha)
• To cancel the annual reduction of 1% of the income tax, adopted in Production Code. This would unify the payment of 25% of the levy and it would help to recover resources, although that would take a step back in politics to promote the production. (Andres Romo, Analyst)
• A cut on advertising and logistics spending is one of the options that were considered by large sections of opposition. This would be a good example to stop spending resources unnecessarily. The estimates are $ 300 million a year. (Ramiro Teran, Assemblyman)

The BDH is received by 1’912,240 Ecuadorians monthly

(MZ)