The organic law on economic efficiency that the Government of Daniel Noboa sent to the Assembly would have a net fiscal effect of approximately 832 million dollars in favor of the treasury. This amount would be collected in fiscal year 2024. This is stated in the technical report of the law, which was sent to the National Assembly as an urgent matter on the night of November 27.

The largest volume of revenue that this collection will enable would be the new remission of interest, penalties and additional fees arising from tax or fiscal obligations corresponding to SRI. That is, President Noboa’s tax proposal once again resorts to the traditional amnesty that has been applied in other governments to obtain an emergency flow.

The former director of the SRI, Francisco Briones, criticizes the article on tax reform and points out that it includes a proposal for free zones that the government of Guillermo Lass has not adopted

According to the technical report, signed by Jorge Antonio Villarroel, Deputy Minister of Finance (e), about 960 million dollars could be obtained from this amnesty, but these funds could only be received once in 2024. That is, it is not an income that will be will be permanent or sustainable over time. However, this report indicates that for subsequent fiscal years, “the increase in economic activity should at least offset the annual recurring revenue effect calculated by the SRI.”

According to Albert Acosta Burne, editor weekly analysis, The referral issue is an alternative used by all governments that allows agents who question SRI calculations to drop their disputes. For Acosta, it’s a mechanism that will give the state coffers some relief in the short term while also benefiting taxpayers. “It is a short-term measure, which gives him additional income, since now there is no more income,” he says.

In any case, he assures that the correct measure in the future must be the adjustment of consumption, otherwise you will have the same problems again at the end of 2024.

Meanwhile, Acosta believes that there are three fundamental pillars of law.

First, the biggest change in the tax issue, apart from the amnesty, is the provision that large taxpayers withhold 3% of their income as a monthly income tax payment. It is paid month to month, but is settled later at the end of the year. This, for Acosta, creates a negative flow for these large taxpayers, and within them for exporters, who were not deprived before. It would also affect those who, if applicable, had no profits but losses. In addition, the return time, which would not be instantaneous, would eventually affect them.

It is positive that there are tax incentives for employment, says Acosta, but he assures that it is very important to first work on the issue of legal security and violence and crime, as well as on the competitiveness of the country. “The stimulus doesn’t hurt, but you can’t expect big changes without addressing these issues,” he says.

What changes does the new tax reform proposed by Daniel Noboa bring?

Two other important issues, he says, are legislation on free zones and public-private partnerships (PPP). Regarding these points, he said that it is important that there is a law on the free zone and the APP.

On the issue of free zones, which the Assembly and the Constitutional Court have already denied, the former director of the Tax Administration (SRI) Francisco Briones said on his social networks: “I think it is positive that Noboa took what was done by Lasso’s cabinet on free zones and public-private alliances and again proposed it to the Assembly. “This is how a country is built.”