Noboa proposes to lift VAT to face internal conflict

President Daniel Noboa proposed to lift the Value Added Tax (VAT) from 12 to 15 percent to fight the internal armed conflict declared in Ecuador due to increasing insecurity.

Just before Friday midnight, Noboa sent an urgent economic bill to the National Assembly (Parliament) that included increasing the tax, a measure some experts described as neoliberal and with an impact on vulnerable sectors.

If the legislature approves the bill, the three-point increase in the VAT would be implemented as of March 1, 2024, and all products and services would increase their value.

The bill states that all individuals and legal entities, either Ecuadorian or foreign, residing or carrying out economic activities in the country are subject to the provisions of this law.

The Executive branch expects to collect an additional 1.071 billion dollars in taxes this year.