The tax reform sent by President Daniel Noboa to the National Assembly creates a new sales tax, which will affect the working capital and liquidity of the sector, the National Chamber of Aquaculture (CNA) warned in a statement this Thursday, November 30.

On Monday, November 27, 2023, the executive branch sent the 96-page Organic Law on Economic Efficiency and Employment Creation to the legislature, which contains reforms to various legal entities. In the first title, the reforms of the Law on Internal Tax Regime are determined, which are elaborated in detail through 20 articles.

Pablo Lucio Paredes expresses himself about the tax reform: it is insignificant and does not attack the fundamental problems of the country

The CNA specifically expressed concern regarding Article 13, as it states that it proposes that taxpayers themselves withhold up to 3% of the total realized income per month, which they consider that “the measure represents a sales tax that would be paid in advance monthly, creating a deficit illiquidity and exacerbating the little available working capital.”

In the project, the Executive Power requests in Article 13 that at the end of Article 45, which refers to “other withholding taxes”, in the current Law on the Internal Tax Regime, among other points, to add that: large companies Taxpayers must pay themselves income tax withholding (IR) on a monthly basis from the total taxable income realized in the specified month, the percentage of which will be determined by a general decision. “The value must not exceed 3% and will constitute a tax credit at the time of settlement of your IR.”

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For CNA’s executive president, José Antonio Camposano, the imposition of a 3% sales tax would result in a reduction of limited working capital, leaving them without the necessary liquidity to operate. “This measure, which we questioned in the previous Government, is still a harmful proposal today,” Camposano announced on X (formerly Twitter).

The union has announced that it will appear before the Economic Regime Committee of the National Assembly to present its reasons why it believes that the Executive Committee’s project harms the competitiveness of the shrimp production chain, which they insist “should be rejected.”

According to the sector, it accumulates $1.4 billion in losses in 2023, due to “weakening consumption in China and other key markets, creating unsustainable pressure on the production chain”.