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Ecuador VAT rise to 15% April 2024

President overrules Parliament to impose 3% VAT rise from 1 April 2024

Ecuador’s new President, Daniel Noboa, on 9 February 2024 overruled parliamentary attempts to impose an emergency VAT rise. He had originally proposed a temporary rise from 12% to 15%; but now may impose a temporary rise to 15%. Longer term, the rate will fall 2% to a permanent 13% rate.

The president will to use funding from the VAT hike to strengthen the military, police and intelligence services to combat organised crime.

13th Jan 2024 requests National Assembly for VAT rise to 15% 1 March 2024

Seeking to raise funds to take on organised crime, the President has proposed raising VAT from 12% to 15%. This tax rise proposal is now with the National Assembly. The implementation date could be 1st March 2024.

Ecuador VAT was cut to 12% in 2017.

Such a hike in indirect tax could raise $1 billion per annum.

Ecuador has one of the lowest VAT rates in Latin America. Neighbouring Colombia and Peru pay 19% and 18%, and the rate is 21% and 22% is some countries in the region.

Ecuador, which until recently was a relatively safe country compared to the rest of the region, saw its murder rate more than quadruple between 2018 and 2022 as criminal gangs linked to drug trafficking became more powerful.


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