Digital Transformation Law: report gives the green light to incentives for the audiovisual sector, but leaves out renewable energies

With eight votes in favor and one abstention from Assemblywoman Diana Pesántez, the Economic Development Commission approved the report for the second debate on the Digital Transformation Law, which is dealt with urgently in the Assembly. In this project, the audiovisual sector benefits from various tax incentives. However, on the other side of the coin, the renewable energy sector is left out of the benefits, by eliminating Article 17, which was lamented by various members of the CREO, ID and independent assembly.

In the days prior to the debate, both sectors of civil and business society asked both the Executive and the Assembly to incorporate benefits for their sectors that – they assured – would result in a competitive improvement for their areas and, therefore, greater economic activity and employability.

Jorge Luis Hidalgo, manager of GreenPower, a gas industrialization company, which seeks to promote the national gas sector, explained that as a civil society Several business representatives and environmentalists had proposed that tax incentives be given to new investments in the electric, renewable and gas industrialization sectors. He assures that although it could be thought that the energy sector has nothing to do with digital transformation, electricity is the food of digital transformation and data management.

At first, the incentives were accepted by the Executive and this was stated in the original project. However, these days this article has been withdrawn, at the initiative of the UNES bench and without proposing an alternative text. He explained that any digital application requires a data center because digitization requires data management. To give an example, said that a well-known national bank can consume more energy than the entire city of Ambato, among other applications, Due to the high energy consumption of the data center.

When talking about digital transformation, the issue of electricity generation must be taken into account, as well as when talking about the poultry sector, one must talk about the balanced one, he exemplifies. The proposal was to support new investments in private renewable electricity generation from the issuance of this law, which are not part of public selection projects, which are managed by auction and rather to provide energy to private companies. The incentive was ten years of income tax exemptions.

However, Hidalgo explains, this industry has not been able to promote because they have to compete with the electricity sector that is subsidized and with sectors that generate energy with subsidized fuels. According to Hidalgo, for each dollar invested in this sector, the Government would save from $6 to $36 in subsidies. Unfortunately, from the UNES sector it was considered that this industry has nothing to do with the issue of transformation and they interpreted it as a way to benefit a powerful economic sector, although the only beneficiary of this reform not passing is the fuel importers that only this year will handle imports for $7.5 billion.

In any case, from the CREO bench it was hinted that the Government will insist, possibly on another bill with this type of initiative.

Meanwhile, Mariana Andrade president of the Corporation of Audiovisual Producers of Ecuador (Copae), He voted for the law to be approved in plenary session of the Assembly and then accepted by the Executive and thus various proposed incentives are legally established. Several of them came in the original proposal of the Presidency of the Republic, but from the Assembly a new one was incorporated: the Audiovisual Investment Certificate.

Andrade, who in addition to representing Copae has been appointed spokesperson for the National Federation of Chambers of Tourism (Fenacaptur); the Association of Audiovisual Producers of Ecuador (APAE), the Chamber of the Audiovisual Industry of Ecuador (CIAE); the Association of Documentalists of Ecuador (ADEC), the Audiovisual Workers of Ecuador (TAE); to the Society for Collective Management of the Rights of Audiovisual Producers, to the Association of Ecuadorian Photographers, the Association of Producers of Towns and Nationalities (Acapana), explained that for all these guilds it is important that this certificate be incorporated, which acts as a 37% income tax credit. He explains that this tax benefit is enjoyed by several countries in the region.

For Andrade it is important to have all these tools that will help attract international productions. He explains that since the pandemic the consumption of digital audiovisual products has grown exponentially. He comments that major chains like Netflix, HBO, film companies have seen the opportunity to produce in Colombia, in Turkey, even in Peru recently filmed transformersbill.

For the filmmaker, the incentive to the audiovisual and film industry not only generates employment in this sector, but also extends to tourism, food, transportation, construction, among others.

The assembly members of the Commission undertook to send the electronic signatures that legalize the approval of the report, so that this can pass immediately and pass it on to the Presidency, so that it can beto be discussed next Friday, before the legislative vacancy.