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Draft Law for Productive Development ( 2018-06-22 )

The Bill for Productive Development that was sent by the President of the Republic, Lenin Moreno, to the National Assembly on May 24 last as an emergency, although it is noticeable to be improved, stimulates national and foreign investment .
This bill contains several incentives such as the exemption from income tax for new productive investments in sectors prioritized for up to 10 years, and up to 20 years for new investments of basic industries in border cantons, and the exoneration of the advance of this tax ; remission of interest, fines and surcharges of tax, fiscal and customs obligations, for which purpose the taxpayers who intend to benefit from it must pay the totality of the owed capital; gradual elimination of foreign exchange tax for new productive investments that sign investment contracts; simplification of procedures for the approval of construction projects for low-income housing, where zero tariff and VAT refund are established, etc.
It is positive that the power granted to the Central Bank of Ecuador to finance public spending is eliminated; that a general budget of the unfunded State be prevented, and that the balance of the public debt does not exceed the equivalent of 40% of GDP, except in the period of fiscal stabilization which will last for a maximum of 3 years. I hope that's how it is.
In addition to these advantages and the possible improvements, it is essential that the State reduce public spending, because without it, because of more investment that the country is attracted, it will not be able to get out of the "bump" in which it finds itself. It is really unusual that the previous government that came to have income that no one else even dreamed of, left us indebted to the brim. It is also healthy to be exempted from the foreign exchange tax to payments made abroad for the amortization of capital and interest generated on loans granted by institutions that operate in international markets, for a term of 3 years, via credit, deposit, purchase of portfolio, etc., and that are destined to the financing of microcredit or productive investments, provided that the interest rate of said operations is equal to or less than that defined by the Monetary and Financial Policy and Regulation Board.
Another notable advantage is the return of the ISD in the export activity and the payment of commissions in receptive tourism services, a rate that can be reduced gradually before the favorable opinion of the Ministry of Finance. I would like to highlight the fact that in this bill the ominous article first of the Organic Law for the Defense of Labor Rights is repealed, which allows the State institutions that have coercive jurisdiction to collect their debts, in the case of legal entities. , initiate actions even against their shareholders, who respond with all their assets; which threatens elementary precepts of corporate law. I hope that this bill, with the improvements made by the assembly members, will boost the economy, and encourage investment and employment, which should be its objective. (O)
Miguel Macías Carmigniani,
lawyer, Guayaquil

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