The Government announces the increase in VAT to 15% – 2024-02-25 07:37:30

Juan Carlos VegaMinister of Economy, in an interview for Teleamazonsaid that he IVA will be raised to 15%, the maximum that the law allows for Daniel Noboa.

Vega confirmed that Noboa will use the prerogative conferred in the tax reform that he carried out, where it was raised that VAT rises from 12% to 13% permanently, with the possibility that the head of state can raise it to 15% if he sees it necessary prior approval of the Ministry of Economy and Finance.

This tax increase was proposed by the president Daniel Noboa with the justification of continuing with the work of the Armed forces against terrorism. However, there has been criticism of this premise, since the money collected will go to national accounts.

Vega assured that the measure will be applied “to sustain the successful campaign to combat insecurity«. It will come into effect from 1 AprilAfter the Law to Stop Armed Conflict be published in the Official Registration.

With the increase in VAT to 15%, the Government plans to raise an additional 1.3 billion dollars.

Vega did not give details about the time it will be in force the increase in VAT. He explained that the 2024 Budget Proforma sent to the Assembly on February 20 does not contemplate the increase in VAT.

Adjustment does not cover the deficit

He added that President Daniel Noboa will apply the targeting of the fuel subsidy “whenever he sees fit.” And that the plans are already ready, but that they will not touch the domestic gas and diesel.

«It will always focus on protecting those most in need. Initially diesel will not be touched and will not affect the country’s competitiveness,” he emphasized.

Vega said that The economic adjustment allows the economy to be financed, although it does not completely cover the existing deficit. Regarding the increase in Currency Outflow Taxjustified that it is necessary to maintain the security campaign carried out by the National Government.

With respect to closure of oil exploitation at the Yasuní ITT, recognized that this could be extended beyond August this yearclaiming that a risk report must be carried out.

Currently in Ecuador, the prices of 85 octane gasoline, the most widely consumed, are frozen at $2.40 per gallon (3.78 liters), while diesel has a fixed price for the consumer of $1.75 per gallon. gallon.

“We have great pressure on public finances, and we have responsibly taken measures to recover the country, create opportunities, above all generate employment”Vega highlighted.

The head of the Economy and Finance portfolio recalled that the fiscal deficit that the Noboa Government inherited, amounted to nearly 5,000 million dollars, equivalent to almost 5% of the gross domestic product (GDP), which for this year will make The financing needs of public accounts are around 9,000 million dollars.