President Daniel Noboa This Friday, February 9, 2024, he managed to carry out his initiative to raise the Value Added Tax (VAT).
Noboa obtained his purpose after the National Assembly did not get the votes to ratify its initial position on Monday of not approving the VAT increase.
Nor did he gather enough to accept the partial veto of the President with which he insisted again on his proposal.
Thus, the ‘Law to Confront the Internal Armed Conflict, the Social and Economic Crisis’ will come into force with the last modification made by the head of state.
This poses raise VAT from 12% to 13% permanently and circumstantially up to 15% if Noboa himself so decides, following a favorable opinion from the Ministry of Economy and Finance.
The President had only presented that objection to the approved text initially by Legislativeso the rule will also contain other modifications introduced by the assembly members, such as a special tax on the profits of banks and cooperatives of between 5% and 25%.
Likewise, the motions to raise the foreign currency outflow tax to 6% (ISD) and to impose a 5% tariff on construction materials.
With the increase of up to three percentage points in VAT, the Noboa Government estimates increasing the country’s tax collection by about 1.3 billion dollars without affecting the products of the basic basket, which would not be affected by this measure.