Moreno Announces Advance Tax Payments for Companies During His Report to the Nation
24 mayo 2020
ECUADOR

On May 24, President Lenín Moreno gave his Report to the Nation, announcing his intention to apply an advance tax payment mechanism to companies and people with high purchasing power. The idea is for the uptake to go to social protection projects and the “Reactívate” credit program.

During his presentation of the Report, Moreno indicated that the advance tax payment scheme will apply to those earning over USD 5,000 a month. This also covers companies earning more than USD 5 million which have not taken any economic losses during the pandemic.

Likewise, the president indicated that the powers granted by the Constitution will be used to implement this measure, meaning that Moreno could do this in one of two ways:

  • Executive Order: According to the provisions of Article 165 of the Constitution, once the State of Exception has been decreed, the president can decree early tax collection. In other words, Moreno can rule that all taxpayers paying income tax make their payments during 2020, without waiting for the end of the fiscal year.
  • Partial veto: In this case, the president can present an observation to the Humanitarian Support Law involving alternative wording, which may not include any topics not covered by the regulations. In this way, the National Assembly would be in charge of deciding how to implement the new tax measure.
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