Tax amnesty and reprofiling of the debt of the Ministry of Economy and Finance with the Central Bank of Ecuador (BCE) for up to 30 years, which are part urgent economic law for economic efficiency and job creation The debate will be concentrated on the plenary session of the National Assembly, which is scheduled for the afternoon of December 12 this year.

The plenary session of the legislative body was convened for this Tuesday at 15:45 to participate in the first debate on the urgent economic project sent by the President of the Republic Daniel Noboa Azín, whose objective is to obtain funds from tax incentives.

On Sunday, December 10, the Committee for Economic Development approved a report to be presented at the plenary session, which included several changes proposed by legislators.

One of them, the tax amnesty, which is provided for in one of the transitional provisions, which states that “taxpayers who settle all due tax obligations on the date of entry into force of this law or those taxpayers who have been notified of the statement of differences or the draft record by the date entry into force of this law, will enjoy a 100% amnesty of interest, penalties and additional fees arising from taxes whose management and collection is the responsibility of the Internal Revenue Service (SRI).

According to the Ministry of Economy, this measure would leave the state with about 960 million dollars until 2024, which would be equal to 16% of the fiscal deficit of 6,000 million dollars.

Daniel Noboa sent his tax reform project to the Assembly

Legislator Leonardo Berrazueta, from the bench Civil revolution (CR), indicated that the legislative commission accepted at least 80% of the objections raised, among them the abolition of the real estate income tax because it seemed “excessive” and was eventually dropped from the report.

Also, the labor regime sought to be implemented in the free zones was seen as capable of generating “job insecurity and was welcome”.

According to Berrazueta, this initiative does not have a “tax” character, but a “collective” one, and the fact that the amnesty of interest, fines and surcharges is proposed would help encourage and pay capital debt and give the state access to a higher collection.

That tool would help the executive get about $800 million in revenue, the lawmaker commented, insisting that the purpose “is not to forgive anyone’s debt, but simply to create an incentive and even facilitate the seeking of external loans.”

Representative Vicente Taiano, from Christian Social Party (PSC), recognized that there are problems that have been corrected such as the collection of income tax on the sale of real estate, although the problem must be corrected due to the existence of “a tax table that does not currently apply, but would apply in the future.” ».

He emphasized that the proposal provides income tax relief for jobs, but the reduction is proportional when young people from public universities are employed, and it will be changed to include those from private universities in order to ensure equality.

As for public-private alliances, it would be about unblocking bureaucratic procedures, and he did not rule out that tax forgiveness is at the center of the discussion on that presidential initiative.

Cathedral Mariana Yumbay, Pachakutika (PK), pointed out that this initiative will not reduce the fiscal deficit and that it only achieves “forgiveness of the debtors themselves”.

“This regulation will not reduce the fiscal gap and have the resources to solve the crisis; Furthermore, there is an effort to make work more flexible with the proposal that young people work for six months, which is a departure from the rights provided for in the Constitution. “There are unconstitutionalities in this law.

Legislator Jorge Peñafiel, from Buildhe looks worriedly at this legal body because it has “ease in dealing with what is necessary for the state”.

“The reform must provide solutions for the state’s fiscal gap, which according to experts’ estimates would amount to 6,000 million dollars, but this rule solves approximately 800 million dollars. We don’t see the forest to see the trees. This reform may be intended to kick the ball forward.

He exemplified the proposal to refund value added tax (VAT) to the real estate of “big builders”.

“The president offered to abolish VAT for construction materials, he did not offer to return VAT to individual builders. There are differences that we will highlight. The project is not enough,” said Peñafiel and warned that this proposal has complex reforms such as “reprofiling the debt at the central bank and dollarization itself could be in trouble.”

This refers to Title IV, Article 23 of the project, which states: “On one occasion, all public debt obligations currently maintained by the Ministry of Economy and Finance at the Central Bank, directly and through public financial entities, can be reprofiled on the basis of the amortization plan that corresponds to the availability of the general state budget and the maturity profile of the public debt, up to a period of 30 years.For this purpose, the parties can sign a payment contract.

Representative Lucio Gutiérrez, from Patriotic Society Party (PSP), He did not exclude that there are good articles that he will support, but what is “unpresentable” and what he will not support is the tax amnesty.

“By forgiving those who always fail, injustice is done to those who pay, because there are businessmen who respect the law. On the contrary, the law must be strengthened in the direction of tax collection because they are the same as always, who profited six times from this pardon. Above the table they speak against the bankers, and below the table they forgive their debts,” he asked.

This legal initiative, directed by the president, aims to immediately stimulate employment and increase tax collection and investment incentives through the implementation of free zones and public-private alliances.

Its second hearing is scheduled for next week because the 30-day deadline for its adoption is of an urgent economic nature.