Taxpayers should continue to follow the progress of these proposed economic measures. If enacted, taxpayers should ensure that they comply with the new tax provisions.

Rafael Correa, President of Ecuador, proposed the Solidarity Contribution Draft Law, which would fund a multi-billion dollar reconstruction following a devastating 7.8 magnitude earthquake, on April 16. If approved by the National Assembly, the proposed economic measures would apply in May.

Under the proposed economic measures, the value added tax (VAT) on movable assets and services would increase from 12% to 14% for one year. Goods included in Articles 55 and 56 of the Ecuadorian Internal Tax Regime Law would be exempt. This proposed economic measure would not apply to affected zone taxpayers in Manabí and Esmeraldas.

The proposed economic measures would require a contribution of one day's salary for those earning $1,000 to $5,000. If the salary is more than $1,000, the contribution would be one day's salary for a month. If the salary is more than $2,000, the contribution would be one day's salary for two months and so on according to the salary.

The proposed economic measures also would include an increase in the corporate income tax from 22% to 25% for one year and an additional 0.9% tax on individuals with capital of more than $ 1 million dollars.

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