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Ecuador lowers taxes on capital sent abroad, guns

Ecuador lowers taxes on capital sent abroad, guns
© Reuters. FILE PHOTO: Ecuador President Guillermo Lasso meets with U.S. President Joe Biden in the Oval Office at the White House in Washington, U.S., December 19, 2022. REUTERS/Leah Millis/File Photo

QUITO (Reuters) – Ecuador will lower taxes on capital sent abroad and items like alcohol and trim overall value-added tax on specific shopping days this year, President Guillermo Lasso said on Tuesday.

Capital sent abroad will this year be taxed at 2%, instead of 4%, Lasso said in a televised address, making imported products like machinery cheaper and attracting foreign investment.

Sales tax will be cut to 8% from 12% during four long weekends this year, Lasso, a conservative former banker, added, and taxes on sugary drinks, beer, alcohol and other items will also fall an unspecified amount.

“This is good news for everyone, with these actions the state is putting about $140 million in the pockets of citizens,” he said.

Lasso has pledged to shore up Ecuador’s economy, which was battered by the COVID-19 pandemic.

He reached a new trade deal with China this month and also restructured his country’s debt with the Asian country, but has failed to nudge oil production to promised new heights amid protests against his government.

Taxes on guns and ammunition, which can only legally be purchased by state entities and private security companies, will be cut sharply from 300% to 30%, Lasso added, in a bid to help fight a crime wave.

“That way we’ll facilitate the legal provision of equipment which is so necessary for the fight against crime,” he said.

Rising crime and violence in the streets and in prisons has drawn the worry and ire of Ecuadoreans. The government blames the violence on drug trafficking gangs.

Source: Investing.com

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