VAT revenues dropped, despite the additional 2%

The Solidarity Act in force after the Earthquake, which increased the value added tax (VAT) from 12 to 14%, was not enough to raise the collection of this tax in July.

Last month USD 386 million (internal operations, including the 2 VAT points rising) were raised with this tax, slightly lower than what was collected in the same month of 2015 (USD 389 million). The revenues goal of this tax was neither achieved, envisaged in USD 439 million, according to data from the Internal Revenue Service (SRI). Without considering the increase of 2 VAT points, collection of the tax fell by 16% in July.

The VAT fall is recorded since August last year. The results are explained by a drop in consumption, a tangible reality in different places in southern Quito.