The implementation of the tax reform is being continued by the Tax Administration (SRI). This time he issued circular no. NAC-DGECCGC23-00000004, which refers to the application of the abolition of value added tax (VAT) and income tax (IR) of taxpayers belonging to the Simplified regime for entrepreneurs and popular companies (Rimpe), which are popular and entrepreneurial companies with sales of up to 300,000 dollars per year.

The measure applies immediately to institutions of the national financial system, credit card companies and taxpayers acting as withholding agents, according to the SRI.

The circular clarifies the following:

“With this measure, we continue to promote entrepreneurs and popular companies by reducing their costs, improving their cash flow and promoting the use of electronic means of payment instead of cash by reducing transaction costs,” said SRI Director General Francisco Briones.

Last June, the Constitutional Court gave a positive verdict on the Decree on the Organic Law to Strengthen the Family Economy sent by President Guillermo Lasso and as part of the reforms several points were established for Rimpe, among them that popular companies with annual sales up to 2500 USD do not pay IR, and when they exceed this value up to 20,000 USD, they will pay progressive installments, with a maximum of 60 USD.

Likewise, in the regime, those who have annual sales of up to 300,000 dollars are considered entrepreneurs.

What does the Law on Strengthening the Family Economy say?