Keys to paying income tax from 2022

As of this year, the changes included in the Lasso tax reform apply. People who earn $2,000 or more pay more income tax.

One of the main components of the so-called Economic Development Lawapproved in November 2021, are the changes to increase the collection of the Income tax about the natural people.

These changes have provoked criticism from political and social sectors for what is claimed to be a “blow to the middle class.” The Ecuadorians who must contribute more, from this 2022, are those who earn $2,000 or more each month.

The key points of the new income tax payments are detailed below:

1.- Before the tax reform by Guillermo Lasso, the Income tax it was actually paid for by people with monthly income greater than $2,304.

2.- From 2022, the Income tax Ecuadorians pay it with income of $2,000 or more. That represents 1% of the working-age population.

3.- On average, the increase in the amounts disbursed to the treasury is 255%.

4.- Those who immediately feel the approved changes are the people who work in dependency relationship. From them, the employers withhold each month the proportional amount of the total payment that corresponds to them for the year.

5.- Before the Lasso reform, they could present personal expenses for more than $14,000, or the equivalent of 200% of GDP per capita. Now, the maximum limit is $5,000.7 in housing, health, food, clothing, tourism and education, including the concepts of art and culture in the latter category.

6.- The concept of deduction of personal expenses and changed it to tributary credit.

7.- Before, at income annual gross (all remunerations, including tenths and reserve funds) the personal contribution to the IESS was subtracted. The resulting amount was in turn subtracted from the total of the personal expenses presented, which resulted in the tax base on which the tax was calculated. Income tax.

8.- Now, the amount resulting from the income less the personal contribution to the IESS is directly the tax base on which the percentage is applied according to the SRI table The result is the tax payable, which may be reduced with the personal expenses.

9.- If you earn less than $2,007, you can discount up to 20% of the maximum limit of the gpersonal datathat is, to tax to pay you can subtract up to $1,000. On the other hand, if you earn more than $2,007, that discount or tributary credit It can only be up to $500.

10.- Until January 31 of each year, the projection of the personal expenses.

11.- In March 2023, the weight of the payment of the Income tax Professionals in free exercise and who work under billing will feel it.

12.- The people included in the Simplified Regime for Entrepreneurs and Popular Businesses (Rimpe) have a different table for the payment of the Income tax. In general, payments are reduced by up to 85% compared to the previous system.

13.- According to the Ministry of Economy, changes in the Income tax they will produce $72 million of additional revenue in 2022. Starting in 2023, that revenue will increase to $662 million. (JS)