The Constitutional Court has two decree laws in its hands and there is no clear procedure or time to process them, since this is the first time that this kind of situation has happened in the country: a cross death that dissolved the National Assembly and left the executive power for a few more months through these decrees which must be analyzed by constitutional judges in order to enter into force.

The debates have already been convened by the Constitutional Court (US): on Tuesday, June 6, arguments will be presented for and against the decree-law that includes tax reform, and on Thursday, June 8, the decree on investments. Within the body of constitutional control, it is considered that a procedure should be built for the processing of these decrees, since procedures have not been established for these cases.

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And that is that “there really isn’t such a clear regulation that would allow one to know with certainty how much time the Court will take.” What should happen is that after the hearing, the reasoning judges draft the opinion and send it to the General Secretariat of the Constitutional Court. When he is there, it is up to the president of the Constitutional Court to convene a plenary session and familiarize himself with both projects,” says Esteban Polo, former adviser to the Presidency of the Constitutional Court.

He believes they won’t take too long to resolve: “I think it will be about two weeks after each hearing.”

And he clarifies that the Constitutional Court must analyze each of the provisions contained in the decrees and show which are in accordance with the Constitution and which are not. The first will have a positive opinion and can take effect. Provisions contrary to the Constitution will not have a positive opinion and therefore cannot enter into force.

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

Whether the saying will be accepted or not is another debate. “Two years ago, a wild tax reform was introduced by law. The decree law seeks to dismantle the wild increase; which immediately returns income to citizens who are savagely attacked by crime and crisis. That is why it is urgent, because of the people, not because of a theoretical constitutional dogma. Proceed immediately,” Carlos de Tomaso, editor and professor of constitutional law, told the Constitutional Court publicly via Twitter. While the constitutionalist Stalin Raza warns, also in this way, that the judges will “patiently” take all the necessary time, and the review they will make will be under the standard of “strict control” in order to determine whether the matter is really economic and whether they are ” urgent”. “If the legislative proposals were previously rejected in the Assembly, the control will be even more demanding and they will almost certainly not be accepted,” he adds. He even believes that the request of the Court to the President to submit a report in which he explains the reasons for the economic urgency of the regulation “at first sight means that it is not justified”.

The organic regulation for strengthening the family economy implies a change in the mechanism of income tax reduction, whereby 99 percent of those who pay this tax will have a reduction, and the Government proposes that this effect should be implemented immediately because it included a provision on the reduction that will apply from this year .

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The President of the Republic, Guillermo Lasso, in his Report to the Nation indicated that there are 195 million dollars that will no longer go to the treasury with this reform, but will remain in the families as soon as the Constitutional Court approves the project and in the meantime. “I hope from the month of May; if not, from June,” he said. May is ruled out because the tax reform debate will be on June 6.

Although at the beginning of 2023, those working in a maintenance relationship presented their projection of personal expenses and reductions with the current scheme, and based on this, the amount of income tax is deducted from their monthly salary, if the tax reform is applied immediately, future discounts would benefit.

Currently, taxpayers can already submit a new expenditure projection in July or August so that the employer can recalculate the tax. The form can also be submitted in any month if the worker receives a raise.

Anticipation of a future increase of between 5,000 and 7,000 million dollars in Ecuadorian exports from free zones, through a legal decree if approved

This is based on Resolution NAC-DGERCGC22-00000018, which amended the previous resolutions and which is effective after publication in the Third Supplement of the National Gazette no. 60, dated May 11, 2022, which indicates that, “when, during the fiscal year, there are changes in income, exempted income or in the projection of personal expenses of the worker, the employer will perform an appropriate recalculation for the needs of future monthly suspensions. In the event that the employee believes that his projection of personal expenses will be different from the one originally presented, he can submit to his employer, in the months of July or August, a new document for the re-liquidation of the corresponding future suspensions by deduction.

“This new document can also be presented in any month of the fiscal year, provided that changes in the projection are caused by an increase in the worker’s salary or wages or exempted income at the suspending employer or at other employers, or when previously predicted personal expenses are less than the actual assessed”, it is stated in the aforementioned decision.