The Government repeals the ISD for the importation of fuel derivatives, according to Decree 327

The president of the Republic, Guillermo Lasso, announced that he has repealed the foreign exchange outflow tax (ISD) for the import of hydrocarbon derivatives, biofuels and natural gas. He did it through Executive Decree 327 that he signed yesterday. Thus, this tax for this specific sector goes from 4.75% to 0%.

In a video posted on his Twitter account, the president recalled that fuel imports Until recently they were carried out exclusively by Petroecuador, however, the regulation has been changed with a view to free market and free competition, to allow importation by private enterprise.

Thus, this reduction in the tax will also allow imported fuel not to increase in price. For this reason, it considers that this decision will guarantee the existence of good quality fuels and ensure their permanent supply.

According to the decree, the ISD reduction will be applied to transfers, shipments or transfers of foreign currency abroad, in cash or by money order and checks. So also to transfers, shipments or payments of any nature, including compensations made with or without intermediation of institutions of the financial system for this type of imports.

The decree provides that within fifteen days, the Internal Revenue Service (SRI) must modify any resolution of a general nature that is pertinent and will update the forms in order to apply the reduction provided.

Previous steps have been taken to facilitate the importation of fuels. A few weeks ago, Petroecuador signed contracts for the use of its infrastructure for reception, storage, dispatch at terminals and refineries with companies such as Primax Servicios WFSE Ecuador, Corpetrolsa, Terpel and Duragas. The fifteen-year contracts allow the use of the oil docks of Esmeraldas, La Libertad and Tres Bocas, in addition to the pipelines and the storage and dispatch systems of the terminals and refineries of the public oil company, in exchange for a fee. Also signed with Sycar and Gasvesuvio for the importation of natural gas.

In accordance with Oswaldo Erazo, executive secretary of the Chamber of Petroleum Derivatives Distributors of Ecuador (Camddepe), the decree facilitates the importation of fuel, in accordance with what the Economic Development Law already said. For Erazo, at this moment it becomes attractive to import super gasoline that is free of price. However, this represents only 4.6% of total fuel consumption. On the other hand, there is still no incentive to import extra and ecopaís gasoline, since its price is frozen. On the importation of gas, Erazo considered that this issue should be analyzed: “We are allowing imports, while in Ecuador burners are burned with associated gas that, processing it, serves the same purposes.”