First modification:
The new tax reform, which was presented last week at the Carondelet Palace, the seat of the Executive branch, is the first law by decree signed by Guillermo Lasso, after decreeing the “cross death” and dissolving the National Assembly with an opposition majority that promoted a political trial against him.
Rule by decree. The president of Ecuador, the conservative Guillermo Lasso, signed the first law after decreeing the “cross death”, which abolishes the National Assembly, with an opposition majority, and after announcing the advancement of general elections.
The initiative expands the ceiling of tax exemptions based on the members of each family and becomes the first legislation that appears during the extraordinary period in which Lasso will govern by decree.
The decree provides for an increase in annual deductible expenses, which may be up to $15,294 depending on the number of family responsibilities. In Ecuador there are 341,000 taxpayers who pay income tax, and the reform would benefit 99.8%, who would each have an average saving of $558 in their income tax payment, according to the Ministry of Economy. and Finance.
“It replicates the bill that had been sent to the National Assembly last week,” said Pablo Arosemena, Minister of Economy, who recalled that there is “special sensitivity for families that have several family responsibilities or rare and catastrophic diseases.”
The new reform creates a 15% income tax rate for sports betting houses.
The text, after being signed by Lasso, will be sent to the Constitutional Court for its corresponding review and validation. “We are going to continue in the line of putting money in the pockets of Ecuadorian families, especially in the middle class and micro-entrepreneurs,” added the minister.
The official anticipated that new laws will be presented in this period.
President Guillermo Lasso resorted to “cross death” when the assembly held a political trial of censorship for an alleged crime of embezzlement (embezzlement) for conditions detrimental to the State in some oil maritime transport contracts.
Ecuador bonds fall
Ecuador’s sovereign bonds fell after President Guillermo Lasso, who is facing impeachment, called an early election. “President Lasso’s announcement shocked Ecuador’s sovereign credit, with bond prices plummeting,” Goldman Sachs’ Sergio Armella said in a note. “In general, Ecuador’s willingness to meet its obligations remains the most important thing for investors,” he added.
Spreads jumped above 1,800 basis points, meaning investors require more than an 18% premium to buy Ecuadorian debt compared to US bonds.
with EFE
