The recently adopted Law on Economic Efficiency and Encouraging Employment notes improvements in its text compared to the one sent by the executive branch, but leaves doubts in its application in relation to those who may or may not benefit from the tax amnesty it represents.

The issue of forgiveness has raised many doubts because it is a comprehensive tool that allows you to avoid paying interest, penalties and additional interest charges from the Tax Service (SRI), the National Transport Agency (ANT), on loans. services which, among other things, are managed by state entities. In this sense, there were also voices that criticized because it was interpreted that it was intended to favor some political companies, among them the President of the Republic Daniel Noboa himself, since Bananera Noboa is one of the main debtors in the country and is connected to the president’s family. There is even another debt company that would be related to the family of Kronfle, the current president of the Assembly.

However, the transitional provision tried to limit this option for politicians and thus avoid a conflict of interest, as the Minister of Economy Juan Carlos Vega himself mentioned.

The provision of the law states: “The pardon referred to in paragraph 1 cannot be used by the President of the Republic, representatives in the National and Provincial Assemblies, nor their relatives up to the fourth degree of consanguinity.”

However, Pablo Guevara, a partner in the tax consulting firm Andersen, believes that the way the law is written, politicians’ companies will be able to profit from it, especially since the law prohibits the benefit of natural persons, but does not say anything about the issue of companies.

In this sense, Napoleón Santamaría, also a tax expert, comments that the law raises doubts on this point, although the spirit was to avoid benefits for politicians and their companies, the way it is written does not make it completely clear that there is such a prohibition regarding with their companies. In any case, he believes that this issue could be clarified through the regulations that will be adopted later. Even if it were to be fixed, Santamaría says that ultimately does not change the fact that the amnesty is designed to forgive the mistakes of those who avoid paying, he assures.

For his part, Guevara doubts that the pardon can generate a lot of income because there have been several pardons and it is possible that the debtors who were willing to pay had already received it earlier.

Both Guevara and Santamaría agree that the text approved by the Assembly has been improved. Guevara assures that a series of corrections of errors and impressions could be made from the Assembly. Santamaría, on the other hand, says that despite being a better law, it is a limited law that does not help correct structural problems. “It’s a small law, but it’s not a bad one.”

Among the novelties, an introduced chapter that was not in the original proposal is the possibility that controlled foreign companies that do not have tax residency, but whose beneficiary is a resident, pay tax. Currently, a controlled foreign company did not pay tax if there was no dividend distribution, and now it must do so even if there is no distribution.

For Santamaria, it is also important that there is finally a law on the free zone, since it has already been rejected three times in the Parliament.

As for the self-taxation of large taxpayers, Guevara maintains that it is the strongest measure to accelerate collection. That should mean between $600 and $700 million a year, but they’re paid monthly. Comment that this advance is only for 500 companies that are large taxpayers. He explains that this measure, although it may bring income to the coffers in advance, deprives companies of operating capital.

For Santamaria, the issue of work was much better, simpler and more digestible in the sense that it benefits those who create new jobs for young people, without creating a table or percentages.

Meanwhile, Ecuador’s country risk stood at 2,086 points on Tuesday, December 19, 47 points below that recorded last Sunday. The withdrawal coincides with treatment and approval in the second reading of the bill.