Once the processing of the Executive’s urgent project on the investment law began in the National Assembly, the legislative blocs began to propose that the repeal of the tax reform, in force since November 2021, be included in that project, although other sectors consider that They must be punctual reforms.
The economic authorities were summoned to the Economic Development Commission, which processes the Executive’s proposal, this March 2. One of the guests, the Minister of Production, Julio José Prado, closed any possibility of a repeal of the tax law, although he leaves a possible reform to dialogue and the opinion of the other economic sectors of the Government.
According to the schedule approved by the Development Commission, the deadline for the approval of the urgent project in two debates will expire on March 24. For this reason, this week will be dedicated to receiving the sectors involved in the issue to listen to their observations before preparing a report for the first debate.
On March 2, the analysis of the Investment Law begins in the Economic Development Commission
The coordinator of the Social Christian Party (PSC) bloc, Esteban Torres, said that the option to repeal a tax via legislation is in force in the investment bill, since any legislator during the discussion of the bill can propose the inclusion of a punctual repeal in the project, such as the wealth tax or a repeal of the entire text.
Minister Julio José Prado, regarding the processing of the urgent project, said that the Government is willing to talk to improve the proposed investment law, but that they are not in favor of repealing the tax law, which has been in force for two months. , since it is a law that seeks to give stability to the country’s economy and strengthen finances, precisely to create more jobs and attract investment.
What the current urgent project does is complement the Law for Economic Development and Fiscal Sustainability. The law is new and has to be implemented, and it must be given time to start working. In any case, the proposal of some legislators will be an issue that will have to be decided by the assembly members and the political bloc.
The official stressed that modern export service free zones are being incorporated into the proposed investment law, to be able to export agro-industrial products, textiles, footwear, that is, all types of manufacturing. All this will allow to have industrial parks; but, in addition, areas even at the level of certain cities in the country.
Legislative precedents
The analysis of the political sectors of Parliament is based on some legislative precedents. For example, in 2018, when the Assembly processed the Organic Law for Productive Development, a general provision was introduced, at the request of the CREO movement block, which reduced the special consumption tax rate on kitchens and kitchenettes to 0%. to gas.
But also, by motion of the PSC bench, in that same law a repeal was introduced, as a general provision, to the Law of the Teaching Hospital System of the University of Guayaquil, where the tax of two per thousand on the capitals of legal entities that carry out commercial, banking and industrial activities domiciled in the Guayaquil canton, which was created in order to build, equip and maintain the hospital of the University of Guayaquil.
The assemblywoman and vice president of the Development Commission, Wilma Andrade (ID), said that it is not possible to repeal the entire tax law, because the legislative procedure must be observed, and also the Constitution determines that only the Executive has the initiative to repeal matters tax.
But, if some text on taxation is included in the Executive’s proposal on investments, changes may be introduced; otherwise, it is not feasible, insisted Wilma Andrade. Although his co-idea Johanna Moreira, on his social networks, announced that he will propose adding an article to the urgent investment law to “repeal Lasso’s tax package, which was imposed on the country through the Organic Law for Economic Development and Fiscal Sustainability”.
Legislator César Rohón (ex-PSC) pointed out that some changes can be made to various legal bodies, but repealing the tax law is impossible, since that decision will have to be made by the full National Assembly. If as a result of the discussion it is seen that it is necessary to reform certain important legal bodies, it can be raised; but, in the end, it will always be the plenary that approves them.
On the other hand, legislator John Vinueza (IND) considered that the National Assembly does not have the power to apply changes to the tax reform, however, he said that in the investment law that is currently being discussed, the matter on the constitution of the Zones is taken up again. Economic Development Specials (Zedes), which was eliminated in the tax reform; but it is a very punctual subject.
But changing the tax law requires a parallel process and that is currently being worked on in the Assembly, unless part of the investment law deals with something related to taxation, stressed Vinueza, a member of the Economic Development table.
Darwin Pereira, from the Pachakutik group of rebel legislators, affirmed that punctual changes can be applied to the tax reform, because it is an urgent economic project that can reform another one in force. But he warned that the risk is to fall into a trap, because the Assembly can apply changes to the investment law, but if the Executive vetoes those changes, it will be difficult to gather 92 votes in the midst of a not very encouraging environment in the Legislative. (I)
Source: Eluniverso
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