Government exonerates the flower and tuna sector from advance payment of 100% of income tax
2 de abril de 2015

floresOn March 25, the Government, in its efforts to support exports promotion, through Executive decrees 645 and 646, signed by President Rafael Correa, set the exemption of 100% advance payment of the income tax, favoring the flower and tuna export sectors, strongly affected by factors exogenous to the national economy.

This exemption is due to external causes, such as devaluation of major buyers’ currencies, market gains of our main competitors, the fall of international prices, among others, which have caused loss of competitiveness of Ecuadorian products, including these two important items of non-oil export supply: flowers and tuna.

The aforementioned Executive Decrees are covered by Article 41 of the Organic Law on Internal Taxation, which states that “in exceptional cases duly justified, in sectors or subsectors of the economy that have suffered a drastic reduction in income due to unforeseeable causes, by substantiated request of the relevant Ministry and with the fiscal impact report from the Director General of the Internal Revenue Service, the President of the Republic, by decree, may reduce or waive the advance fixed value to the sector or sub sector.”

“Additional to this decisive action to stimulate exports, the National Finance Corporation (CFN) is implementing the Funding Program for flower growers with Market Crisis, especially oriented to small and medium enterprises (SMEs). This tool will be available until the end of 2015 and aims to support flower companies with potential for economic business recovery, and that demonstrate that have been affected by factors exogenous to their business activities. Beneficiaries, in turn, should have a business plan to face the situation the country is going through.

It is noteworthy that this stimulus to Ecuadorian exporters is consistent with Resolution 013 of the Foreign Trade Committee (COMEX) of March 20, that enacted the application of the simplified procedure for refund of foreign trade taxes –drawback. This was announced earlier this week by the Coordinating Minister of Production, Nathalie Cely, and the Minister of Foreign Trade, Diego Aulestia.