The President of the Republic, Daniel Noboa, was open to the application of mixed VAT, in which one part is temporary and the other permanent. He also said that he agrees that there are profit contributions, that he is not closed to increasing the tax on foreign exchange outflow (ISD) and that he is in favor of targeted subsidies that do not affect citizens. He is also considering a moratorium on the closure of ITT, and finally, he does not agree with a wealth tax for the agricultural sector.

The statements were made in a conversation with Teleamazonas, where it became clear that he plans to implement a series of measures to finance the internal war in the fight against drug gangs, but also the enormous deficit and financial needs of the state. So this Monday, January 22 morning, he explained that he is studying other options besides the VAT increase. The country has a deficit of $5.5 billion, but also has internal and external debt of $5.0 billion and total arrears of $4.0 billion.

He said that in the VAT alternative, part could be temporary and part permanent. This is because Ecuador also needs to show the world that it has good fiscal health.

“It’s not just about VAT; “That’s how to finance this war, that’s how to fight against narco-terrorist groups that are full of money.” And he added: “In VAT, you can talk, you can look for a middle ground.” I agree that it is partly temporary, partly permanent.” He also indicated that the state will reduce the amount by at least 1000 million dollars.

President Nobo complained that some political parties, which are now opposing these measures, have a selective memory. He recalled that in 2016, due to the earthquake, VAT was temporarily raised to 14% to finance the reconstruction of Manabí and Esmeraldas; He also wrongly commented that VAT was temporarily raised during Lenín Moreno’s government.

He also said that he would agree to collect part of the profit in the two years 2022 and 2023, which were the least open, but which were also the two best years of banking.

He believes, however, that the introduction of wealth tax, especially for farmers, would be a setback. He explained that those with a farm of 20, 30 or 40 acres, but only $10,000 in cash, would have to go into debt to pay about $180,000 in taxes, which “makes no sense.”

On the fuel subsidy issue, President Nobo said the targeting does not affect the people. He was also emphatic when he commented, “We need to focus on subsidies while improving energy efficiency, both in electricity and in refineries.” Even the president said that maquila could be sought for refining to reduce costs and also to reduce subsidies.

The president also announced that Leonidas Iza, head of the Confederation of Indigenous Nationalities of Ecuador (Conaie), who has organized strikes against the abolition of subsidies on previous occasions, will have no arguments against: “We will not abolish subsidies, people.” nor to a small farmer.” He also quipped: “What a shame that we disappointed Leonidas Iza, who will no longer have a relaxation speech,” he said.

The president also said he was in favor of a moratorium on the Yasuní ITT issue. He explained that, considering that we are not in the same circumstances as two years ago, it could be a profitable option.

As for the ISD increase, Noboa said he is not closed to that option, but that it needs to be discussed with the Legislature.