President of Ecuador proposes increase in VAT to finance the “internal armed conflict”

The president of Ecuador, Daniel Noboasent a bill to the National Assembly (Parliament) for study in which it proposes an increase in Value Added Tax (VAT) by three percentage points, reveals the document released this Friday by the Government.

The project, called Organic law to face the internal armed conflict, the social and economic crisis, asks for VAT increase 12 to 15 percent.

“The impact on revenue of increasing the VAT rate to 15% would imply an increase in revenue of 1.306 million dollars”, according to the Executive’s calculations reflected in the document sent last night for study by the Assembly, which indicates that the measure could come into force from March 1st.

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harsh measures

On Thursday, Noboa had anticipated that complex actions would need to be taken in the current situation: “We must take tough economic measures and we must be aligned because a war costs and costs money”, he said.

“So we must take important actions and measures together with the Legislature”he commented in a radio interview.

In the statement sent to the Assembly, Noboa recalls the complicated economic situation of the current administration and highlights that the current debt situation highlights the need to adopt proactive tax measures to avoid the accumulation of long-term debt.

“Increase VAT would provide the government with a constant source of revenue that would not only allow it to pay off existing debts, but also avoid the accumulation of new financial obligations, thus promoting fiscal responsibility”, reads the bill, sent urgently, so the Legislature has a month to deal with it.

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Internal armed conflict

In the statement sent to the Assembly, the Presidency highlights that, in recent days, the country has seen a series of violent acts, including kidnappings, massive prison riots and, in general, “terrorist acts”.

These events, attributed to criminal gangs, occurred as the Noboa Government was preparing to implement its plan to regain control of Ecuadorian prisons, many of which are internally dominated by organized crime groups.

In the midst of this situation, Noboa this week decreed that the country is experiencing an internal armed conflict, declared organized crime groups terrorists and ordered security forces to “neutralize” several criminal groups accused of spreading extreme violence.

Source: Elcomercio

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