The Central Bank of Ecuador (BCE) announced this Wednesday morning, November 29, that it closed the country risk on Tuesday, November 28, 2023. from 1,925 it went to 1,963 points. This shows a new escalation in this indicator, which measures the risk that a country will not meet its international debt obligations.

Escalation occurs after President Daniel Noboa sent to the National Assembly his first proposal for an urgent economic law containing the announced tax reform, and also after learning the answer Vice President Verónica Abad to his task of collaborating for peace in Israel.

Country risk at 1915 points, without major changes after meeting the new Minister of Economy and waiting for the tax reform

Country risk on Monday, November 27, was at 1925 points, even during the weekend it was at 1915, but on Tuesday it fell to 1963.

Monday evening The executive authority sent the legislative body a draft of the Organic Law on Economic Efficiency and Employment, in which reforms are proposed in terms of taxes and incentives for employment, as well as for attracting investments.

The tax reform would have a net fiscal effect of approximately 832 million dollars in favor of the treasury, this amount would be collected in the fiscal year 2024, according to the government that took office last Thursday, November 23.

Daniel Noboa’s tax bill, with tax amnesty, would leave $832 million net to state coffers

Yesterday too Vice President Verónica Abad reported that he will abide by Noboa’s assignment that he announced on Friday, November 24th. “Be collaborators of peace and prevent the escalation of the conflict between that country and Palestine.”

Country risk is measured by investment bank JP Morgan and published by the Central Bank of Ecuador.

Analysts: It is an insignificant reform

In the meantime, among the changes proposed by the tax reform, the 96-page text, the following stand out:

Economic analyst Pablo Lucio Paredes described the tax reform as insignificant. He did this on his What do we need? The elimination of so much unproductive spending and the tax reform that lowers taxes creates a simple system with no advantages for some,” analyzed Paredes.

Meanwhile, in a radio interview, the expert recalled that the Ecuadorian state as a whole spends more than 40,000 million dollars a year. He pointed out that one alternative for solving the state’s problems is the reduction of expenditures, but since the regime did not mention this possibility, the other alternative that remains is an increase in income.

“The government says: With the reform, I will increase revenues, with some things I gain and some things I lose, about 800 million dollars… if there is an increase in collection, I insist, it is sad that there is no explicit reduction in costs,” said Paredes.

He reminded that between 12 and 15 tax reforms have been implemented in Ecuador in the last 20 years, but he regrets that the only thing that has been achieved is to distort the tax system more and more. “That is, I give you an advantage, I give you a discount, I give them here. Now it is given, for example, to builders, there it is given to producers of renewable energy sources, there it is given to those in free zones, and we have seen many times that these things here and there do not give positive effects. , nothing is happening. This issue of giving tax incentives to create jobs has already been done, it was in the law from 8 years ago, in the law from 5 years ago, in the law from 3 years ago and they are not working, what they are they are small. palliatives for a more general problem,” explained Paredes.

Meanwhile, two days after the presentation of the project in the National Assembly, the production sectors did not comment on its content. This newspaper sought the opinion of the Ecuadorian Business Board and the Chambers of Commerce of Guayaquil and Quito, but until now they continue to analyze the content and still have no definition in this regard.