Ecuador Delays Tax Bills After Protests

by Mike Godfrey, Tax-News.com, Washington

19 June 2015

The President of Ecuador, Rafael Correa, announced on June 15, 2015, that he has temporarily withdrawn two controversial tax bills following several days of protests.

Correa earlier proposed a "wealth redistribution law," which would increase taxes on a sliding scale for inheritances worth more than about USD35,000. The rate would range from 2.5 percent to 47.5 percent for direct heirs, but in the case of indirect recipients it could be as high as 77.5 percent. Currently the inheritance tax is only levied on sums larger than USD68,800. He also intends to hike the tax on capital gains.

The proposals were originally expected to be debated by the National Assembly next month. However, Correa said on June 15 that he has decided to put the tax bills on hold in order to allow time for public debate. He also said that he wants to ensure a peaceful environment during Pope Francis's visit to the country between July 5 and 8.

There have been reports of clashes between opponents and supporters of the tax bills. The opposition has demanded Correa's resignation.

TAGS: capital gains tax (CGT) | inheritance tax | environment | tax | economics | fiscal policy | law | Ecuador | tax thresholds | tax rates | tax reform

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