In order to stimulate increased investment, improve the competitiveness of industries and contribute to changing the environment and the ease of doing business in Ecuador, the Chamber of Industries of Guayaquil (CIG) submitted to the Government 14 proposals that are part of the Investment Initiative for the Reactivation of Ecuador.
Francisco Jarrín, president of the CIG, explained this Monday that the proposals are focused on five axes: lack of financing, procedures and cost structure, incentives and taxes, entrepreneurship and the labor market, and that they were delivered by the union last Friday to the Minister of Production, Foreign Trade, Investments and Fisheries, Julio José Prado.
Eliminate the “excessive requirements of liquidity funds demanded from the financial system” to have a greater supply of productive credit; release resources from the Deposit Insurance Fund to channel them into productive credits; incorporating raw materials and capital goods in the list of tax credits and refund of the foreign exchange exit tax (ISD), and the extension of business hours are part of these proposals that were launched by the Chamber of Industries on January 20. “We have been working, seeking to contribute to investment becoming an issue, a country goal that allows us to get investment to the country and that through investment jobs are generated that our country needs so much,” he said. vase.
Chamber of Industries of Guayaquil launches initiative to attract investment to the country
He stressed that to develop them they allied with the Ecuadorian Institute of Political Economy (IEEP), which as a technical entity are the facilitators of the initiative in which more than 72 organizations participated, including unions, analysts, the academy, among others; in six meetings at the national level, between February and April of this year.
Jarrín pointed out that these proposals are tools so that decisions can be made that “are on the court of the president (Guillermo Lasso)”, noting that not only were the proposals delivered, but also the mechanism of how to implement them from the Executive, so He described them as “turnkey”.
The proposals are the following:
1.- Reform the regulations of the Public-Private Partnerships Law (APP) –No impact on tax revenue-
For:
• Autonomy to decentralized autonomous governments (GAD).
• Make PPP registration viable.
• Strengthen private initiative.
How?
• Competence to issue technical guides and deadlines.
• Updating of APP Committee records and sessions.
• Requirements and procedures.
Regarding this first proposal, the president of the CIG pointed out that they worked with the current Law to identify what changes are needed to attract investment.
2.- Reform of the Regulations of the Economic Development Law, approved in November 2021
For:
• Greater access of companies to tax incentives.
• Public-private dialogue.
• Access to information.
How?
• Use formula for existing companies.
• Form Advisory Council.
• Update of data on investment contracts.
Jarrín indicated that this law, until now, has no regulation and has to do with the incentive of 3% and 5% when investment contracts are signed.
“We believe that this can have an immediate impact, because there are companies that have been making investments throughout this year and that have believed in the country and have to be able to apply these incentives and new investments that are made,” he said.
3.- Regulate the Drawback of the Tax Simplicity Law of 2019
For:
• Improve competitiveness of the export sector.
How?
• Simplified procedure.
• Time limits for operations in the Foreign Trade Committee (Comex) and the National Customs Service of Ecuador (Senae).
4.- Incorporate raw materials and capital goods in the list of tax credits and ISD refund.
For:
• Counteract ISD impacts on production costs.
How?
• List of 382 subheadings of raw materials and capital goods = $61 million.
5.- List of tariff reduction
For:
• Counteract impacts of tariffs on production costs.
How?
• List of 238 subheadings of raw materials and capital goods = $106 million.
Unions and business chambers showed support, but also made observations to the Law of Attraction of Investments
6.- Regulations to reuse used oils within the production processes themselves (without impact on tax revenues)
For:
• Provide clarity and eliminate excessive paperwork.
How?
• Authorization through the Management Plan for lubricated oil (companies with an environmental license).
7.- Extension of business hours (without impact on tax revenue)
For:
• Provide more time for customer service (shops, restaurants, bars and nightclubs).
How?
• Hours 24/7.
• Remove unnecessary restrictions.
“This is in line with generating greater business opportunities in small businesses that today are regulated in their schedules,” explained Jarrín.
8.- Reform of the Chemical Substances Regulation (without impact on tax revenues)
To change:
• The current regulation: unnecessary requirements and military custody to transport substances.
How?
• Simplification of requirements for authorizations.
• Delete military custodian.
• Transition period.
9.- Improvement of the regulations for bunkering (without impact on tax revenues)
For:
• Eliminate procedures and costs for the import and export of oil derivatives.
How?
• Eliminate the need to guarantee foreign trade taxes.
• Customs regulations adapted to the dynamics of the sector.
10.- Liquidity reserve requirement
For:
• Eliminate excessive liquidity fund requirements from the financial system.
• Have a greater supply of productive credit.
How?
• Eliminate the liquidity reserve
11.- Deposit Insurance Fund (without impact on tax revenue)
For:
• Release resources to be channeled for productive credits.
• A greater banking offer.
How?
• Contribute what is fair and necessary to the fund.
• Periodic technical review of the fund coverage limit.
12.- Domestic liquidity ratio (without impact on tax revenue)
For:
• Release resources to be channeled for productive credit.
• Greater banking offer.
How?
• Reduce the coefficient to levels close to the operating liquidity needs.
• Periodic technical evaluation of the coefficient.
13.- Tax qualification of Panama
For:
• Facilitate the attraction of investment, for productive credit through the stock market.
How?
• Exclude the Republic of Panama from the list of countries considered tax havens.
14.- Generate the Biess investment portfolio (without impact on tax revenue)
For:
• Improve the proportion of Biess investment for private securities.
How?
• Modify the Biess investment policy.
In this last proposal, Jarrín explained that it seeks to change the policy of financing funds so that these funds are also destined to the stock market that allow financing productive activities and new investments.
Meanwhile, he expressed that these 14 proposals are part of a total of 40 that will continue to be delivered to the Executive as they are ready.
“This is not the only thing, there are other proposals that came out of the initiative, that we will continue working on and the idea is to continue delivering them,” Jarrín assured, adding that of the 40 proposals, 25 can be applied directly by the Executive and the others 15 need Assembly approval. (YO)
Source: Eluniverso
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