The first legal decree signed by the President of the Republic Guillermo Lasso after death crosswas a tax reform to reduce taxes.

The decree on the organic law to strengthen the family economy is now in the hands of the Constitutional Court (CC) for pronouncement, and according to the director of the Tax Administration (SRI), Francisco Briones, there is no deadline for that answer, it is In other words, there is a “legal limbo” .

Francisco Briones, from SRI, before the August elections: I hope that President Guillermo Lasso will finish his term

But Briones is waiting for a positive statement. This project proposes to reduce taxes while simultaneously collecting about 20 million dollars through sports forecast operators and abolishing the 12% exemption from value added tax (VAT) that public broadcasts had.

What is the expectation in relation to waiting for the opinion of the Constitutional Court?

That it be approved and that Ecuadorians can enjoy tax cuts very soon.

Is there a deadline in this new scenario that gave birth to the death of the cross?

Constitutionally, it is the first time that it is applied (death on the cross) and therefore the way is made by walking. One of the questions that is not defined in the law is how long the court has to answer about it. It is not defined in the law. So what the President is doing is sending an urgent response to the Court and we hope that it will be very quick, however, there are no defined minimum and maximum deadlines for the response.

So there is a legal loophole…

There is a legal limbo regarding deadlines. I understand that the Court, after dismissing all the unconstitutional claims (crucifixion deaths), is working on the kind of regulations that will shed a little more light on this and make it clear how they will work on the new laws.

The document mentions the income tax relief scheme, which will be higher the more the taxpayer has family obligations, and the table is changed…

Yes, a new system was introduced that did not exist before in Ecuador, which seeks greater tax fairness. The economic reality of each household is considered and recognized, that a household with one level of income is not the same as a smaller or larger household with the same level of income.

If a person with no family responsibilities earns $1,500, they cannot pay the same taxes as a person who earns $1,500 and takes care of their parents and children, why? Because their cost level is higher, even today the existing legislation does not consider that. Both pay the same.

What this scheme intends to do is to be fairer and recognize the different economic realities in households around their size: how much benefit a taxpayer has. (Then) for someone who has zero expenses, a maximum level of deductible expenses is allocated, and then that level of deductible expenses increases as the family burden increases up to five burdens. And this deductible expense corresponding to each taxpayer translates into a reduction in income tax, which is equivalent to 18% of the total expenses reported.

On the bright side, people (without checkout) had a $500 discount today, which is practically double ($964). And in the current law there are two discounts, 500 and 1000 dollars. $500 for those earning more than $24,000 a year and $1,000 for those earning less, and we’re raising the rebate to nearly triple $2,753 for those with up to five loads and whose deductibles can go up to $15,294.

With this change, how much do you expect to raise?

$200 million is what we said.

These are the tax changes that will occur with the first legal decree issued after the death of the cross

One of the new points of the regulation is the uniform tax on the income of sports forecast operators, who pays?

Although companies that own sports platforms in Ecuador pay profit tax, in accordance with the general regime, i.e. 25% of profit, good practice in the world is that this business has a special treatment., and just as there is a single income tax on bananas, we are creating this a single tax on the income of sports forecast operators, just as is done in Peru, Colombia and Brazil.

This general regime is established and taxes both parties, platforms and bettors. In the case of platforms, a tax of 15% is created on their total gross income minus the prizes they pay out to bettors. It is the tax base. And the payment will be monthly and will be applied from January 1, 2024.

For bettors, since the prize they receive is taxable income, we form a withholding tax also of 15%, as is identical when the invoice is issued.

Who holds it?

The sports prediction company keeps it when the prize is paid and pays it to me (like SRI). So the company pays me (as SRI) their 15% tax and what they keep from the players when they pay them.

How much do you expect to raise?

A total of 10 million dollars. We started from there because this industry is growing, the idea is to make it even bigger.

And as for the cancellation of the VAT relief that public shows had, what kind of events are you referring to?

Article 56 of the Law on the Internal Tax Regime contains a list of those who are exempt from paying VAT. It is worth clarifying because people think that the public is everything, and they do not include artistic and cultural services such as museums, audiovisual productions, recording of artistic activities…

Public performances are concerts, sports events, circus, all of which would be worthwhile.

Who will pay after this removal of the exemption?

The one who always and at all times pays VAT is the consumer.

Do you think this might discourage holding events in the country?

Not. As it exists boom then give a reason for it. For example, an organizer or any public entertainment activity sells tickets, tickets and currently it is 0% VAT, but buys insurance and it is 12% VAT, buys technical equipment and it is 12%, etc. Everything that is added that could be performed, the concert is purchased at 12%. (So) what we give him is greater competitiveness, because we eliminate them from the cost of VAT… (and now it would be charged) to the users.

What was the basis of that decision and how much is expected to be collected?

This was because we need to give formality to the sector to identify what is happening here in ticketing, it is to give formality and because we also need to charge and that is the appropriate practice in the world. What is exempt from VAT are cultural events, and what is charged is the audience. And 10 million dollars.

The economic and legal decrees announced by the Government should not be ‘flammable’, there are observations about how appropriate they would be legally

And in the case of a tax on sports forecast operators?

You have to make the appropriate regulation for your business, according to the best international regulatory practice, and that is a special income tax for them.

And when would you apply?

What is related to VAT is immediate, income tax is also immediate. What remains for next year are sports forecast operators and changes in Rimpe (the change in this tax regime for entrepreneurs and popular companies is that those with annual sales up to 2500 dollars will not pay income tax, but if sales exceed this value – up to 20,000 dollars – will have to pay, and the installments will be progressive, with a maximum amount of 60 dollars).

Do you think that after these reforms something is left pending?

The tax law can always be improved, but I think that Rimpe’s regime has already been settled. I think that the income tax would be quite good and other things that are not touched in the law, maybe they still need improvements, improvements, but I think that what we have touched on is quite good.

Where will the revenue go?

According to the Law on Public Organization and Finance, all state revenues go to the Treasury’s Single Account and everything that has to be paid is paid.