President of Ecuador decrees early collection of taxes

This decision was already vetoed by the Constitutional Court last August, despite this, Moreno insists on it.

The president of Ecuador, Lenín Moreno, issued a decree aimed at the early collection of Income Tax for the fiscal year 2020.

The decision, made official this Tuesday, reaches all individuals and companies, including permanent establishments of foreign companies not resident in the country.

Those who are obliged to pay taxes in advance are those who obtain income taxed with income tax; those that in fiscal year 2019 have had gross income equal to or greater than 5’000.000 dollars; and those who have obtained accounting profits between January and July 2020.

However, it is a decision that has already been declared unconstitutional by the Constitutional Court of Ecuador. Last August, the Executive tried to implement the early collection of the tax, but the high court vetoed it.

The argument at that time was that the decree did not state for what purpose this exceptional action was taken, a detail that Moreno and his team intend to save on this occasion, making explicit in article 1 of the new decree that the tax revenue will be used to cover «The main outstanding values ​​of the health sector».

According to the decree, numbered 1,137, the Government has more than 154 million dollars pending payment, related to the additional expenses generated by the pandemic, a sum that they hope to exceed with this tax advance

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