ECUADOR

On November 22, the Economic Development Committee presented the report for second and final debate of the organic bill for Economic Development and Fiscal Sustainability after the COVID-19 pandemic. The initiative seeks to optimize the current legislation in order to generate a reliable business environment for job creation. The bill, after being approved in committee with seven affirmative votes and one negative vote, must be debated in the plenary of the Assembly this week. 

The initiative proposes to eliminate tax exemptions and deductions for companies, as well as to establish a contribution by companies with a net worth of more than US$5 million. In addition, it proposes to implement a regularization process of assets abroad, so that the resources generated outside the country are considered legitimate.

For this purpose, the proposal establishes a progressive table to encourage early regularization. Those who do it until March 2022 will pay 3.5%, until June 4.5% and those who delay until December 31, 2022 will pay 5.5%. On the other hand, it establishes the reduction of income tax, which will go from the current 25% to 22% for all companies that decide to invest in Ecuador.

 “It is our responsibility as assembly members of this Committee to create a responsible report. I believe that we should work immediately on the Investment Law, this will give greater hope to businessmen, investors and the people”, said Daniel Noboa, president of the Committee of Economic, Productive and Micro-enterprise Development.