During the campaign, Daniel Noboa offered that his first emergency bill would be tax reform that would not create taxes, but would instead provide tax cuts that would boost employment. He filled it. They emphasize the reduction of income tax for employers based on the number of newly employed people up to the age of 29, and the return of 7 points of VAT on the purchase of construction materials to make housing cheaper, stimulate demand, and create new jobs.

The motivation is excellent. However, the employment of associates and greater dynamism of construction depend above all on good prospects for economic growth, which increase expectations of better sales. 2024 looks bad especially due to two factors: a) abandoning investment in the ITT field and the ruling of the Constitutional Court (US) that investments should be made in destroying the oil infrastructure in that field; b) the huge need for financing increased by the sacrifice of ITT’s oil production, and it is not clear where the money will come from.

The bill proposes little to address financing needs. We have to give him credit for not asking, as in previous years, for an increase in income and property tax that falls on the relatively small number of citizens and companies that send statements to the DZI: the solution is to reduce the fuel subsidy or increase VAT.

In this urgent project, a less strenuous proposal was chosen, that 500 large taxpayers themselves keep 3% of the sales and pay it monthly to the SRI to be cut again with the income tax return. This would create a withholding tax of about $1 billion more than what companies pay in income tax. The executive’s cash flow would improve at the cost of worsening that of the big companies, the illiquidity they would pass on to their suppliers and take months to pay. The result will be slower economic growth than expected. The point is that any policy that involves extracting money from the private sector to pay off foreign debt results in a drain on the economy and a lower growth rate.

To counter this recessionary trend, the Noboa project includes two important initiatives originally proposed by Guillermo Lasso: the creation of free zones to encourage export-oriented investment and a PPP law to attract private investment in public works, including the fifth bridge. I hope that the CC will not object to them.

CC has involved private investments in the ball of consultations. The government must carry out very cumbersome and complex consultations before passing any investment regulations. Then, for each investment project, Maate officials together with the ombudsman must carry out an environmental consultation, and if communities are involved, they must also carry out a preliminary consultation. There are no officials to consult with and no police to defend them from attacks by activists. But for CC who longs for a primitive humanity that lacks technology that affects the environment and lost its virginity 10,000 years ago, investment is not a priority. (OR)