The tax reform to reduce taxes is the first legal decree signed by President Guillermo Lasso, after the application of the death cross this Wednesday, May 17, 2023, which implies the dissolution of the National Assembly and early elections.
Regulation Organic law for Strengthening the family economy has already been sent to the Constitutional Court give their opinion, according to the Minister of Economy, Pablo Arosemana.
Tax reform is Guillermo Lasso’s first legal decree after the application of the ‘death by the cross’
The proposal states that this “attempts to strengthen the family economy and popular business according to the principles of the progressiveness of the tax burden, both with regard to the amount of their income and expenses, as well as the sustainability of public finances”. What tax changes will happen?
Income tax
There will be a bigger discount for paying this tax. Currently, the reduction is 10% and 20% of personal expenses, which were limited to seven basic baskets (around $5,000). A 10% reduction was achieved by those who reported an annual income of more than USD 25,000, and a 20% reduction by those who had less than that value. The reform foresees that the reduction will be 18% of these expenses, but the upper limit and the reduction vary depending on family obligations:
Therefore, 18% of these limits are equivalent to a reduction ranging from $964 to $2,753, compared to the current ones of $500 and $1,000, depending on income level.
Along with this reform, it will also be thought about taxpayer deductions for expenses incurred in the care of their pets. In total, there are six items of expenses that allow deductions: housing; education, art and culture; health; feed; equip; and national tourism.
Tax Reform: Where Will Pet Expenses Be Included in Income Tax Deductions?
Uniform income tax for sports forecast operators
The tax reform introduces a 15% tax on sports forecasting activities
VAT
The Director of SRI explains that artistic and cultural services are not public events
Rimp
Provisions:
The General Provisions indicate that the Personal Expenses Rate Reduction and the Individual Rate Table will be applicable to the FY 2023 rate calculation.
Regulation 742 on taxes will be sent to the Constitutional Court for an opinion and will enter into force after that.
Source: Eluniverso
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