The new tax reform, Lasso’s first decree law after the “cross death”

The new tax reform was the first decree law signed by the president of Ecuadorthe conservative William Lassoafter decreeing the “cross death”, which dissolves the National Assembly (Parliament), with an opposition majority, and advances the general elections.

Lasso decided that this document, which extends the ceiling of tax exemptions based on the number of members of each family, be the first to come out during this extraordinary period in which he will be able to govern by decree until his successor takes office.

The new tax reform, which partially modifies the reform applied by Lasso shortly after coming to power, had been presented last week at the Carondelet Palace, the seat of the Executive branch.

Under a principle of progressivity, the decree contemplates an increase in annual deductible expenses, which may be up to $15,294 (about 14,102 euros) depending on the number of family responsibilities.

According to the Ministry of Economy and Finance, in Ecuador there are 341,000 taxpayers who pay income tax, and the tax reform will directly benefit 99.8%, that is, 340,318 taxpayers, who will each have an average saving of 558 dollars in your income tax payment.

Likewise, the new tax reform creates a 15% income tax rate for sports betting houses.

In statements to journalists, the Minister of Economy and Finance, Pablo Arosemena, explained that the decree law has already been sent to the Constitutional Court for its corresponding review and validation.

“It replicates the bill that had been sent last week to the National Assembly”pointed out Arosemena, remembering that the text has a “Special sensitivity for families that have several family responsibilities or rare and catastrophic diseases.”

“We are going to continue in the line of putting money in the pockets of Ecuadorian families, especially in the middle class and micro-entrepreneurs”, added.

Arosemena wished that the decree law could have the validation of the highest court of guarantees as soon as possible and anticipated that there are more laws that will be issued in this period, all under the common thread of benefiting Ecuadorian families.

The first tax reform issued by Lasso in December 2022 was later denied by the National Assembly, which voted for its repeal, but the president maintained the norm by comprehensively vetoing the Legislative provision.

Lasso resorted to the “cross death” in the middle of the censorship impeachment trial that the opposition launched against the head of state, whom he accuses of an alleged crime of embezzlement (embezzlement) for alleged conditions detrimental to the State in maritime transport contracts of oil.

The president opted for this figure contemplated in the Ecuadorian Constitution of 2008 due to the uncertainty of not having enough votes to save the motion of no confidence in the chamber.

The opposition launched the political trial at the moment of Lasso’s greatest weakness in his almost two-year presidential term, after the heavy defeat suffered in the electoral appointment of February 5, when the Government lost the referendum proposed to apply reforms to the Constitution and, at the same time, correísmo was the great winner of the local elections.

Source: EFE