On November 9, the Economic Development Commission advanced the study of the Economic Development and Fiscal Sustainability bill in the wake of the Covid-19 pandemic.The legislative board received several authorities of the Executive Branch who came to explain the scope of the initiative. Simón Cueva, Minister of Finance, explained that the proposal is aimed at protecting the most vulnerable sectors and that only 3.4% of the economically active population is affected. The committee is expected to approve the report for the first debate in the next few days.
Cueva also pointed out that the main focus of the legislation is to strengthen the country’s fiscal side, since the tax reform plans to raise US$ 1.9 billion in two years. In addition, he pointed out that the initiative proposes temporary contributions that will allow financing the expenses of the pandemic, for which the text proposes a special tax for companies that have a patrimony of more than 5 million dollars.
In turn, Julio Prado, Minister of Production, emphasized that in the area of investments it is necessary to have a “credible plan” that guarantees fiscal sustainability in the long term. The minister emphasized that the new incentives and tax benefits will apply to all sectors of the economy, since the regulations seek to “guarantee legal and tax stability” for investments this year and in the first quarter of 2022.
Vianna Maino, Minister of Telecommunications, said that the project boosts investments and jobs that promote connectivity. Maino indicated that what is being pursued is the development of the sectors, “especially in those areas where connectivity is neglected”. Therefore, the proposal eliminates article 34 corresponding to the payment for market concentration to promote competition of the Telecommunications Law, since the “payment for market share penalizes growth and investments”. In this line, Wilma Andrade (Izquierda Democrática), suggested revising the Income Tax scale with respect to telecommunications, since “it is an important step to generate connectivity”.
After listening to the officers, the legislative board received observations and concerns from the legislators. Cesar Rohon (Independent) questioned that if the country needs liquidity, why does not the Executive Branch act with the stock exchange through some technical financial instrument. Likewise, he proposed to eliminate the Tax on foreign currency outflows and reduce the Special Consumption Tax. At the same time, Xavier Santos (Izquierda Democrática) recommended the inclusion of a new regime that allows the restructuring of debts; the judicial costs of debtors according to their category; and to determine the remission of interests.