After the unfavorable verdict of the Constitutional Court on the draft Decree on attracting and promoting investments, the Minister of Production, Foreign Trade, Investments and Fisheries, Julio José Prado, indicated that for three years the treatment given by other institutions to the Government’s investment law proposal “was palpable a sign of obstruction of the development plan”.

That now the Constitutional Court is the one rejecting it “not because it is unconstitutional”, but because it does not consider it urgent. “Isn’t it urgent to export, invest, hire more people? We continue to delay the opportunities that other countries take advantage of,” he denied. On two previous occasions, it was the National Assembly that was dissolved by the death crucifixion imposed by President Guillermo Lasso on May 17, and for which early elections were called.

The Constitutional Court gives the green light to the tax reduction proposed by the Government, but leaves the initiative of free zones without restrictions

The court states in its opinion that the provisions of the project “do not comply with Article 148 of the Constitution”.

Article 148 stipulates that until the appointment of new legislators, the executive power can issue decrees on urgent economic laws before the positive opinion of the Constitutional Court, which in this case did not issue one.

The minister reminded that it is not the first time that initiatives such as the creation of free zones have been rejected, and that in countries like South Korea, where he was staying these days, the model has several advantages. “Here we have the luxury of rejecting a model that has worked there for decades three times,” he asserted.

Reductions in income tax and VAT for public performances take effect immediately. This is the opinion of the Constitutional Court on the tax reform

He said that it was sent to the National Assembly for the first time in 2021 “with other chapters”, but that it was archived. Then, in 2022, as an investment bill, but lawmakers also shelved it, and it was sent to the Court a third time after the death crucifix was activated. “It was sent to the Constitutional Court in 2023 as a legal decree as a free zone project, they rejected it because it was not urgent,” he said.

According to Prado, this decree-law is “urgent” because it would generate “more employment, more exports, more investments” and added that the difference can be seen when comparing the number of free zones in Latin America with those in Ecuador. “Our industries and products can create added value, but we need a better legal framework,” he said.