Tax reform approval still not secured

ECUADOR - In Brief 25 Nov 2021 by Magdalena Barreiro

After an incomplete second debate of the tax reform, the government still does not have the necessary 70 votes for its approval. Pachakutik (27 votes), Izquierda Democratica (17 votes), BAN (25 votes) could approve the tax reform if their suggested modifications are taken into consideration.And even in this case, it is not sure all legislators from each group will cast a favorable vote. They insist on $2,600 instead of $2,000 monthly as the base salary to implement the increase in the income tax.Also, they demand a cap on tax deductions of $10,000 instead the official proposal of $5000 per year.Estimations at this time are preliminary but both modifications together could reduce tax collections from the reform in around $600 million. UNES will definitely vote against the proposed reform and submitted a minority report with their own proposal where collections—according to UNES --would be higher than those of the official reform, but tax increases would also be higher for corporations and high-level income individuals. Finally, Social Christians (14 votes) are opposed to any increase in taxes, albeit contradictorily they think the reform should not be archived neither should enter by the authority of the law, which implies the legislation's approval even with modifications. The second debate will continue tomorrow –the deadline for the decision of the Assembly on this matter.

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