With the entry of President Laso, the beginning of the new administration has been marked by important social and economic advances and achievements.
On the economic front, Ecuador, as an oil exporter, has been helped by high oil prices, as well as optimism from private investors as a result of a steady vaccination process, the announcement of tariff reforms to take effect on August 1, 2021, and possible tax reform in compliance with the International Monetary Fund.
1. Tariffs
On the other hand, on July 9, 2021, the COMEX (Comisión Ecuatoriana de Comercio Exterior – Ecuadorian Foreign Trade Commission) issued Resolution No. 009-2021, which calls for the elimination and reduction of 667 tariffs on supply products, raw materials, and capital goods as of August 1, 2021.
Import duties have been eliminated on computers, computers, many auto parts, machinery, agricultural implements, carpentry, and industrial tools. Likewise, import tariffs are requested to be reduced from 25% to 5% on digital cameras and 30% to 10% on bicycles.
The Demócrata reported that “in an effort to increase competitiveness, 1,862 tariff sub-clauses were eliminated from the list of products subject to the filing of advance import control documents (DCP), to facilitate, speed up, and make trade management more transparent. The decision was approved by COMEX through Resolution 010-2021. The Ministry of Production estimates that this measure alone will benefit some 30,000 trade operators in terms of reducing procedures and additional costs.”
2. Future tax reforms
According to the aforementioned newspaper, it is important to remember that in 2020, Ecuador approached the IMF and received approval for a 27-month extended arrangement under the Ecuador Extended Fund Facility.
Under the new agreement, the country will receive a total of $6.5 billion to stabilize the economy, expand the coverage of social welfare programs, ensure tax and debt sustainability, and strengthen local institutions to lay a solid foundation for solid, job-rich, long-term growth that will benefit all Ecuadorians.
“Regardless of any amendments to the current tax code, it is clear that the Internal Revenue Service (IRS) must implement administrative measures to improve its operations: the private sector in Ecuador sees the IRS as too bureaucratic. In this context, administrative reform is needed to facilitate tax collection and resolve legal disputes between the state and taxpayers,” the note stated.
Source: El Democrata 13/08/21
