This was confirmed this morning, Wednesday, February 21, 2024, by the Minister of Economy and Finance, Juan Carlos Vega Malo. In addition, he gave details of the new budget proforma for 2024 that reaches US$ 35,536 million and which was presented on the night of February 20 before the Assembly.
On April 1, the new 15% value added tax (VAT) will come into effect in Ecuador. This was confirmed this morning, Wednesday, February 21, 2024, by the Minister of Economy and Finance, Juan Carlos Vega Malo, in an interview on Teleamazonas .
First, in the first days of March, the urgent law to confront the internal armed conflict, the social and economic crisis will be published in the Official Registry, which provides for a permanent increase to 13%, and then the presidential power will be used - which gives that same law - of increasing two more points temporarily.
The minister gave details of the new budget proforma for 2024 that reaches US$35,536 million and which was presented on the night of February 20 before the Assembly.
On the issue of tax collection, which according to the proforma will reach US$15,716 million, the minister explained that this figure does not yet include the increase in VAT. This is because the tax law has not yet officially come into force. Vega explained that the veto will first have to be published in the Official Registry in the first days of March, and that it allows the increase to 13% of VAT, but gives the Government the possibility of raising two more points based on a technical report. Then the Ministry will send said report, precisely recommending that it be raised to 15%, because the country and security situation makes it necessary. Thus, for April 1, 15% will be applied.
The minister also indicated that this 15% VAT will be maintained as long as it is required, but investment income will be evaluated.
He also assured that given the complicated fiscal situation, it will be necessary to focus subsidies. But the gas will not be touched. In the first instance there is no plan to touch diesel, but if it were it would not affect the competitiveness of the economy, he said.
The minister confirmed that raising the foreign exchange outflow tax (ISD) to 5% will also be analyzed, since more revenue is required taking into account that the El Niño phenomenon is already causing havoc on the Coast and the Sierra.
The proforma also reflects a drop in oil revenues. It is established that audited production will be reduced. While in 2023 there were 187.94 million barrels produced, now there will be 156.07 million barrels produced. This is because a decrease in income due to the closure of the ITT has been taken into account. The reduction for this reason would be for a total of US$ 400 million. However, the minister indicated that the feasibility of this being carried out is still being analyzed, but it could happen that a technical closure takes longer, and therefore, this drop in income does not actually occur.
Regarding the price of crude oil, which has been established at US$66.71 per barrel, he said that it is a technical and prudent price. The previous year this indicator was US$64.84.
