The commercial sector warns about taxes

Ecuadornews:

The agreement with the International Monetary Fund (IMF), which involves changes in tax, labor and liquidity management, begins to generate orders from the business sector.

For the Chamber of Commerce of Guayaquil, this reform must include the elimination of the Advance of Income Tax and the Exit of Foreign Exchange.

According to the agreement, the Government proposes to present a tax reform at the end of October of this year. Said reform, as reported by Diario EXPRESO, would imply lengthening the workers’ probationary periods before being hired, not paying liquidation for resignation.

“It is important that this proposal prioritizes tax simplification and reduces the distortions created by several inefficient taxes,” says the Chamber, adding that the reform be used to repeal the most harmful taxes on trade.

On the other hand, raising taxes, either by raising rates or eliminating profits, would be counterproductive to the economy. The reform should not focus on alleviating the needs of the treasury, but on energizing the economy, notes the union.

The analyst José Orellana points out that, as expected, there will be fewer subsidies, fewer tax exemptions, less wage bill, less spending on goods and services. “But from the saying to the fact there is a lot of distance”.

The Chamber warns that an increase in Value Added Tax (VAT) would be negative and would “slow down the economy”. We warn that a possible VAT increase would be detrimental to households, workers and the economy in general. An increase of 2 percentage points would mean a reduction in welfare and production of 3% in two years.

On labor reforms, which have been criticized by workers’ representatives, the House agrees on what the Government proposes, cutting the wage bill. “For this, it will harmonize the salaries of the public sector and the private sector for new workers. As we have stated in various forums and public proposals, wages should reflect labor productivity. It is the best way to win and promote competitiveness, “he says.

According to the labor unions, the rights of the working class cannot be undermined, so they already announce that the reforms that lead to this path will be rejected in the streets. (I)

Source: https://www.expreso.ec/economia/sector-comercial-advierte-tributos-acuerdo-fmi-IF2711947