The tax will be reduced 0.25% in each quarter of 2022, at the beginning of January, April, July and October
With Executive Decree 298 of December 22, the President of the Republic, Guillermo Lasso, made official his decision to progressively reduce the rate of the foreign currency outflow tax (ISD), which he had already announced last Tuesday.
The document includes a single article, three transitory provisions and a final one.
Gradual drop of one point for the ISD, announced by President Lasso, generates positive reactions from businessmen and analysts
The only article states the following: progressively reduce the rate of the foreign currency outflow tax by a quarter of a percentage point (0.25) per quarter during 2022, until reaching a rate of 4% according to the following dates:
- First reduction: January 1, 2022
- Second reduction: April 1, 2022
- Third reduction: July 1, 2022
- Fourth reduction: October 1, 2022
The measure is expected to generate a fiscal impact of $ 200 million annually. Lasso said last Tuesday that a one-shot reduction cannot be made so as not to throw public finances out of balance.
According to data from the Internal Revenue Service (SRI), it collected between January and November 2021 $ 1,095 million per ISD. A figure higher than that collected in the entire year 2020, due to a pandemic: $ 964 million. In 2019, ISD’s revenue was $ 1,271 million.
Meanwhile, the first transitory of Decree 298 provides that the SRI, fifteen days before the dates indicated in the article, will modify any relevant general resolution and update the corresponding forms in order to apply the reduction.
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