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Guillermo Lasso announces plan to avoid economic "tragedy" in Ecuador

2021-09-25T16:28:25.658Z


The president of Ecuador announced on Thursday the points of his proposal for reforms in tax, labor and investment matters


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(CNN Spanish) -

The president of Ecuador, Guillermo Lasso, announced on Thursday night the points of his proposal for reforms in tax, labor and investment matters to "rebuild" the country's economy and avoid a "tragedy". in a message to the nation broadcast in the national media.

The proposal will be presented to the National Assembly this Friday.

One of the most controversial points of the proposal and that raises questions is the adjustment of the deductions for the payment of income tax to those who earn more than US $ 24,000 a year.

"Today we are facing the unique opportunity to rebuild an economy that for too long has been mistreated and distorted by the governments of the day. It is the opportunity to correct vices that we have dragged on for decades," Lasso said at the beginning of his almost half-hour message. duration.

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After four months of government, Lasso presented some figures on the state of the Ecuadorian economy, which he described as a "dramatic reality."

He reported that the public debt reaches US $ 63,000 million, which represents 63% of the national economy, and said that his government inherited an "unsustainable fiscal deficit" of US $ 7,000 million that deepened during the pandemic, but which, according to Lasso, was caused "mainly by previous administrations."

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The president pointed out that the country is experiencing a crisis of employment and lack of opportunities, where only 3 out of 10 Ecuadorians have a formal job.

"If we do not stop this trend urgently, the situation will be even more tragic in the coming years," warned President Lasso.

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This economic reform bill to be processed by the Assembly will be called the "Opportunity Creation Law", and will focus on the creation of other tax contributions for a part of the population, the elimination of certain taxes, the rethinking of relations labor and the incentive to investments in the country.

In tax matters, Lasso proposes:

- Adjustment in income tax deductions for people who earn more than US $ 24,000 annually.

This contribution would be "progressive and gradual".

- The creation of a special contribution to the "richest strata", which would be applied for two years to people with assets of more than US $ 500,000, and for a single time to companies with assets of more than one million dollars and that in 2020 they generated profits and higher sales than in 2019.

- Elimination of VAT on accommodation for foreigners, to encourage tourism.

- Elimination of VAT on basic products such as diapers, masks, alcohol, tampons, sanitary napkins and other feminine hygiene supplies.

- Elimination of the tax on special consumption for mobile phone plans, video games and hybrid and electric vehicles.

- Elimination of inheritance tax for children and spouse.

- In order to motivate the reactivation, the Simplified Tax Regime and the Microentrepreneurs Regime will be eliminated, and instead a Simplified Regime for Popular Businesses will be created.

"It is not the most comfortable path or the easiest politically. It is simply the path of effort and hard work," Lasso said.

In labor matters, Lasso's bill warns that it will not repeal the current Labor Code and proposes:

- Creation of an alternative and voluntary regime of job opportunities to access new forms of employment, which can be adjusted to the current moment and allowing teleworking.

- A regime for start-up entrepreneurs who cannot bear the labor costs of large companies.

- Accrued vacations will not be lost.

- More options for maternity and lactation leave.

- Extension of license for parents.

- Entrepreneurs and artisans will be considered popular businesses for tax purposes.

- There will be no limits to employee profits.

- Profits or retirements will not be touched.

"It will be you, Ecuadorians, who can freely decide what is best for you: whether to take advantage of the opportunity to have a stable job in a new venture that is beginning to grow, or to continue using the current code, which is now 80 years old and that it has produced the labor situation that we all know today, "said the president of Ecuador.

To attract investment and legal security, Lasso proposes:

- Creation of the Secretariat for Public and Private Alliances.

- Enable free zones, with tax incentives for agroecological, community, rural development, agricultural, logistics, tourism and health industries.

- Transparency in customs matters.

Lasso ended his message by insisting that this proposal will make it possible to fulfill his campaign offer to generate 2 million jobs, and called on all sectors to support his bill.

"I know that this law will generate passionate debate. And it is good that it should be. Today, we have the good fortune of living in a free and democratic country, where everyone can express their views (...) It makes no sense that those who defend work oppose proposals for job creation, "he concluded.

Guillermo Lasso

Source: cnnespanol

All news articles on 2021-09-25

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