One of Daniel Noboa’s first moves as President of the Republic was to decree a state of emergency, with the purpose of presenting two urgent bills to the Assembly: the first one seeks to deal with the crisis in the energy sector, and the second is tax reform, he proposed to the legislature on November 27.
The Assembly has 30 days from the date of submission of the bill to complete the process of socialization and discussion of the body of law in the legislature and, consequently, to approve, amend or reject it, in accordance with the Constitution.
Article 140 of this also states that if the Assembly does not complete this process within the stipulated time, the executive can declare it by decree and order its publication in the Official Register, which would take effect by force of law.
Daniel Noboa’s tax bill, with tax amnesty, would leave $832 million net to state coffers
If that happens, the bill would be approved before the end of the year, so it would come into force in January 2024.
If approved before the end of the year, the proposed changes to the income tax (IR) levy will apply from January 2024.
The idea is that the current regime has a leeway in economic terms, since it will only have 18 months to rule.
This reform includes several changes, such as granting tax residency to foreigners making productive investments in the country, a new free zone regime, a withholding tax of up to 3% on their total income by large corporate taxpayers, an exemption from ten years of income tax for investment in renewable energy sources and tax amnesty (exemption from interest, fines and additional fees) on tax obligations managed by the Tax Administration.
It also includes tax benefits for the employment of persons aged 18 to 29 and for the employment of ex-convicts.
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
The goal is to achieve higher tax collection and the reactivation of productive investments. SRI collected 13,502 million dollars in taxes from January to September this year, most of it from value added tax and tax liabilities.
Source: Eluniverso
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