The National Assembly must approve the urgent bill until November 27, if it does not enter into force by the Ministry of Law.
In the initial session to review the observations presented during the first debate of the urgent bill on Economic Development and Fiscal Sustainability, the assembly members of the commission that processes the Executive’s proposal ratified their position regarding the tax base of people’s contribution and the percentage of deductions for personal expenses.
The committee spoke of not considering the observations that were presented during the first version of the project, that the analysis of the second debate will start from those presented by unions, social organizations, public institutions and legislators.
There are five central issues on which the debate in the commission will revolve and on which at least 19 written observations have been submitted by unions, social organizations, public institutions and legislators.
Five issues concern unions, legislators and the Government in an urgent project of Development and Fiscal Sustainability
The topics refer to the percentage of income tax, modifications, the calculation of deductions or their elimination; the calculation of the tax on special consumption (ICE) and exemptions from the value added tax (VAT); the special regime for the repatriation of capital; determine modifications to the inheritance tax; and, the calculation of income tax with respect to transactions and sale of real estate.
In the first review of the project, the legislators showed their concerns related to the contribution table and also reduction of the percentage that a person can access the deductibles for consumption.
In the commission it was said that the key points of discussion, in this last stage of the process, will be focused on the extraordinary wealth tax for both individuals and companies, then the income tax where the dilemma is in how it would modify its collection structure and deductions that may be applied to income tax.
The repatriation of capital, according to the technical team of the commission, received several criticisms mainly due to various incidents that it may have in the area of money laundering, the existence of pre-existing crimes, the ICE on liquors and the Simplified Regime for Entrepreneurs and Businesses .
The legislator César Rohón (before the PSC) ratified that it is essential to maintain deductions for personal expenses in the tax reform, that the pocket of Ecuadorians is favored and not punished, that the reform must be done with balance and justice. This position was shared by Assemblyman Carlos Zambrano, from UNES.
Wilma Andrade pointed out that her party, the Democratic Left, decided to keep the deductions, especially in the percentages that had been initially determined, because when the deduction was raised to $ 10,000, the calculation percentages are lowered, with which the benefit is canceled. That the ID will remain in that the calculation base for contributions begins for those who earn more than $ 3,500 per month.
On the other hand, Assemblywoman Nathalie Arias (BAN) explained that one of the concerns that the table had during the first debate is to avoid irreparable damage to the tax culture, therefore the adjustment in the amount of the deductions to $ 10,000 is born and not of $ 5,000 as initially raised by the Executive.
The representative of Pachakutik Cristian Yucailla indicated that his bench considers that the tax base for people’s contributions should be aimed at those who earn a salary above $ 3,000 or $ 3,500 per month, and at the same time is in favor of maintaining deductibles .
The commission will await the presence of the Government’s economic authorities to present simulations on the tables regarding the tax bases and deductibles.
The representative of civil society, Juan Francisco Jaramillo, also made some observations on the bill that the Assembly is discussing about the wealth tax, where he considers the need to determine the concept or what should be understood as unproductive assets, as well as the need to postpone the timing of the collection of the tax.
Make certain exclusions within the contribution, to avoid double taxation or cascade effect, in addition to excluding vulnerable sectors, and finally, the possibility of amortizing the payment as a deductible expense in periods of up to five years.
Regarding personal income tax, civil society proposed a gradual income tax scheme where there are several levels of deduction, in such a way as to maintain progressivity in the collection of income tax and strengthen the tax culture.
Regarding the ICE and VAT, it is proposed that the rates do not harm the productive sector, consumers and are consistent with environmental policy and the fight against smuggling and informality. (I)
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