QUITO (Reuters) – Ecuadorean President Guillermo Lasso, facing a fresh push to oust him from power, announced on Thursday a proposal to cut tax for middle-income earners and small businesses, but the bill faces long odds due to deepening political instability.
The proposal from the conservative former banker was sent to Congress, where he lacks majority support, using a fast track procedure that could see lawmakers vote on it within 30 days.
Lasso’s tax reform pitch comes as lawmakers are set to vote on a measure to remove him from office, following allegations that he turned a blind eye to embezzlement, which he denies.
The tax proposal would benefit some 340,000 taxpayers and reduce revenue to government coffers by about $195 million.
Last year, the Andean nation collected around $17 billion in taxes, according to official data.
“That’s $195 million that will stay in Ecuadorean homes to pay for health, education or food,” Lasso told reporters during the presentation of the reform at the presidential palace.
“It’s up to lawmakers to line up on the side of the citizens,” he said.
Lasso’s tax reform proposal would modify changes he proposed to lawmakers at the end of 2021, which increased taxes on those who earned more than $2,000 a month by reducing the amount of health, education and other costs they can deduct.
Those earlier tax changes became law after the sharply divided Congress deadlocked, allowing them to enter into force without a vote.
Lasso’s new proposal, however, would be more “progressive and fair,” the economy ministry said in a statement.
The bill would also institute a tax on companies involved in sports betting platforms, as well as on the players, plus another levy for and another on organizers of public shows including concerts.
(Reporting by Alexandra Valencia; Writing by Carolina Pulice; Editing by Sandra Maler)
