As soon as the Constitutional Court convened a hearing to discuss President Guillermo Lasso’s first decree of law after the death cross, which entails tax reformyear, this body began to receive and present the views of those who want to be part of the process amicus curae.
The first document that shows the platform of the Constitutional Court is that of the Company for the activities of sports forecasts and games on the network Sportbet SA, which states that this regulation “would open the possibility for companies offshore operate in Ecuador even without legal status and that the only tax that would be collected through foreign brands would be the 15% that would be paid by the client, leaving the income generated by the foreign companies clearly exempt, the omission and permissibility of their operations in the country”.
And this refers to the fact that the Law on the Internal Tax Regime in article 8, number 8, indicates that the income from lotteries, tombolas, betting and the like, which are promoted in Ecuador, will be considered as source income from Ecuador.
Sportbet believes that the decree that directly favors operators who do not have a fiscal residence in Ecuador is against the Constitution, since there is no generality, fairness and sufficiency of the collection, “directly harming the national company that creates jobs. Encouraging plant closures, mass layoffs, and outsourcing of the branch’s economy.
He gives an example of the average behavior of the client in one day in case the decree-law is approved: if he makes two deposits of 10 dollars and between the loss and the profit at the end, this operation would generate a tax of 15%. companies of $1.5 and 15% tax for the customer would be $6.75; while for a foreign brand, the company’s payment would be $0, and the client’s payment would be $3.
“The law cannot be divided into taxes for the business of domestic companies, and not taxes for the business of foreign companies, where benefits and rewards are given informally, which violates the right to equality and non-discrimination,” the company concludes in its submission to the Constitutional Court.
While the Tax Administration (SRI) maintains that activities involving sports forecasts are configured as sources of income for their operators and therefore taxable activities in the state; “However, due to the complexity of controlling these transactions, which are basically carried out via the Internet or any other technological means, and due to the direct relationship between the operator and the user, which makes it difficult to obtain verifiable information from other sources, a mechanism of taxation is foreseen which, within the framework of the constitutional principles of the tax regime, enables the collection of taxes in this sector”.
This is one of the arguments made in his amicus curae, where it is also stated that “The proposed reform proposes that the amount of deduction of personal expenses of natural persons be in accordance with the number of family obligations, which contributes to respect for the principle of progressiveness of the tax regime and focuses on strengthening the family. the economy. In addition, an incentive is created to strengthen the family as the core of society, tax culture and tax citizenship, while improving tax control by citizens”.
This Friday, May 26, a third official letter was added to the Court, that of the Va por ti Ecuador Platform, which requests that the positive opinion be temporarily rejected, since it is considered that the decree law “has very serious errors” in the form: it does not justify its nature urgent economic, and background: does not inform the Constitutional Court about the technical, economic, legal and tax reports of the Ministry of Economy and the SAI, in order to make a correct assessment in the analysis.
This organization requests that the Constitutional Court open a space for public debate, so that those who are interested in the adoption of the proposed law or who believe that their rights could be affected by its adoption could publicly appear before the Constitutional Court and present their arguments for or against. That this space for discussion with citizens should be available within no less than five days, after the Constitutional Court begins the analysis of the case and the following cases are opened at the Court, as soon as the emergency decrees on the economic law arrive.
He also requests that they be provided with a detailed procedure, including the deadlines set by the Constitutional Court, for cases in which the President of the Republic sends laws of an urgent economic nature to the Court by decree.
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