ECUADOR

On November 2, the Legislative Administration Council (CAL in Spanish) of the National Assembly sent the Tax Reform Bill to the Economic Development Committee chaired by Assemblyman Daniel Noboa (Avanza Party – allied to the ruling party) for its study. The aim of the bill is to optimise current legislation in order to generate a reliable business environment for the creation of jobs. The document was submitted as a matter of urgency. This means that the Assembly has a maximum of 30 days to discuss it. It is expected that the committee will begin the study of the initiative in the next few days.

With this tax reform, the government hopes to raise 1.8 billion dollars in two years. For this, there will be a special contribution from companies with a net worth of more than 5 million dollars. At the same time, the regulation also proposes a higher tax, but in a gradual way, for people who earn more than 2,000 dollars a month or more.

Furthermore, the initiative seeks to implement a process of regularisation of assets abroad, so that resources generated outside the country can be considered legal. To do so, the new proposal establishes a progressive table to encourage early regularisation. Those who do so until March 2022 will pay 3.5%, until June 4.5% and those who delay until December 31, 2022 will pay 5.5%.