08/09/21

SOUTH AMERICA: Ecuador’s president proposes elimination of IHT.

As published on step.org, Wednesday 8 September, 2021.

Ecuador’s president, Guillermo Lasso, has announced that he plans to abolish the country’s inheritance tax (IHT) as it is costly to citizens yet raises relatively little revenue for the government.

Currently, IHT is levied on goods or assets exceeding a value of USD72,090.01, on a sliding scale of rates from 5 percent to 35 percent. According to the country’s internal revenue service (Servicio de Rentas Internas, SRI), the revenue collected from the tax represents only 0.2 percent of the annual tax revenue collected by the government.

At the beginning of September, Lasso said that he plans to eliminate the tax, although he did not stipulate when a tax reform would be proposed or implemented.

Further, the president has said that a renegotiation of the country’s debt with the International Monetary Fund will not involve the creation of new taxes or increase of existing taxes.

In an interview with El Universo, Lasso said that the previous administration had expected to increase taxes to generate USD2.5 billion in revenue. Lasso, however, pledged that there would be no increases to either income tax or value added tax and said that the country will look to increase revenues through measures including greater efficiency of tax collection.

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