Today, Thursday, October 28, 2021, the project for the new tax reform was delivered. It is expected to raise $ 1.8 billion, mostly from those earning $ 5,000 or more and large companies.
Today, October 28, 2021, the Government of Guillermo Lasso submitted a new tax reform proposal to the Assembly. Under the name of Law for Economic Development and Fiscal Sustainability, the Executive seeks to raise $ 1.8 billion between 2022 and 2023.
From 2024, additional income will stabilize at $ 710 million, without the contribution of special contributions on large estates.
According to the Ministry of Economy, the project was going to be handed over to the Legislature on Monday, October 25, 2021, but the decision to no longer dismantling the entire subsidy for extra gasoline and diesel disrupted the plans.
That decision forced to increase the initial collection goal. Within the agreement with the International Monetary Fund (IMF)That goal was projected at a maximum of $ 1,500 million; However, now the gap caused by the maintenance of a part of the subsidy.
Those who have more, pay more
86% of the $ 1.8 billion to be raised will come from two sources: Ecuadorians who have income of $ 5,000 or more and companies with equity of $ 5 million or more.
The Government, after dialoguing with political and business sectors, modified its original proposal under the premise of getting more resources than they really have more in the country.
Thus, in the first place, the tax or temporary contribution on companies will be charged only to those that have $ 5 million equity or more.
For two consecutive years (2022 and 2023), a total of 1,931 companies (1,430 were the Law of Opportunities) you will have to pay that tax
In total, it is expected to raise $ 467 million each year. 10% of that amount, that is, $ 48.1 million will come from companies with equity between $ 5 and $ 10 million.
The remaining 90%, that is, $ 419.4 million, will be the contribution of 1,080 businesses with an equity of more than $ 10 million.
6,000 people will contribute on their assets
In the case of the ctemporary allocation of individuals, only those with assets of $ 1 million or more ($ 2 million under marital partnership) will be charged.
In the Opportunity Law, seeks the contribution of the patrimonies of $ 500,000 or more. That included around 18,000 Ecuadorians. Now, the contribution will only fall on 6,000.
According to Ministry of EconomyThis reduction is due, on the one hand, to the increase in the collection base; and, on the other hand, that up to $ 200,000 will be deducted from the equity value for first homes and unproductive agricultural land.
The expected collection, one-time (2022), is $ 261 million.
Plus income tax rate for income of $ 100,000 per year or more
Currently, the thighest income tax handle It is 35% on income between $ 61,630 and $ 100,000 onwards. The proposal of Executive is to leave that 35% up to 100,000; and increase to 37% if that amount is exceeded.
With this, it is intended that the greater burden of the additional collection is on the shoulders of those who are really in better economic conditions than the rest of society.
The limit of around $ 5,000 per year for personal expenses deductible from income tax is maintained.
However, if your income is less than $ 2,000, those personal expenses cannot be greater than 20% of that amount. Meanwhile, if you win more than $ 2,000, the percentage will be 10%.
In the original proposal, the Executive it projected to generate an additional collection of $ 434 million; but now that value would be added between $ 25 and $ 30 million more. (JS)
DATA.- The bill is of an urgent economic nature. That is, the Assembly has 30 days to process it.
