Ecuador Expands 15% IVA to 60+ Food Products Under IMF Revenue Commitment — $1.5 Billion Target for 2026

IMF Revenue Framework

Ecuador's $5 billion IMF credit facility requires the government to increase state revenue by approximately 1.2% of GDP — roughly USD 1.5 billion — during 2026. The program's fifth review was completed on April 22, 2026, unlocking a $394 million disbursement with four reviews remaining.

The revenue increase decomposes into:

• Tax collection increases: 0.8% of GDP (USD 1.043 billion)
• Non-tax revenue measures: Remainder to $1.5B target

IVA Expansion Specifics

On March 26, 2026, the SRI (Servicio de Rentas Internas) — Ecuador's tax authority — issued a circular applying the standard 15% IVA to more than 60 food products previously exempt or zero-rated.

Products now subject to 15% IVA include:

• Imported lactose-free milk
• Fortified milk
• Pre-cooked pasta
• Fruit pulp
• 56+ additional items

The SRI characterizes these as products consumed "mainly by high-income households," framing the expansion as progressive rather than regressive.

Additional Fiscal Measures

Measure	Effective Date	Detail
IVA on 60+ food products	March 26, 2026	SRI circular
Income tax retention increase	February 27, 2026	Savings bonds <3mo: 2% → 3%
Credit note restrictions	May 2026	60% max credit note use; 40% cash required
Mining sector reforms	By 2027	Projected 0.5% GDP ($650M)

Political Dynamics

Economist Jorge Calderón: "Implementing a tax reform is unpopular, especially before elections."

The observation is pointed. Ecuador's next general election cycle introduces a political ceiling on how aggressively the government can pursue additional revenue measures, even under IMF conditionality.

Sector Impact Assessment

Dairy and processed food importers face the most direct margin compression. Imported lactose-free milk was previously exempt — the 15% IVA represents a binary price increase for products with limited domestic substitution.

Retail and supermarket chains (Supermaxi, Mi Comisariato, Tía) absorb initial pass-through pressure. Whether they hold margins or pass the IVA to consumers depends on price elasticity at the SKU level.

The credit note restriction (May 2026) affects companies that have historically offset tax liabilities with accumulated credits. The 40% cash floor forces liquidity planning changes across every sector.

What to Watch

• Consumer price transmission. Track CPI food-basket changes from April through June to measure whether IVA increases pass through or get absorbed.
• SRI circular expansion. The initial list targets 60+ items but the "high-income household" criterion is vaguely defined and may expand.
• Mining revenue timeline. The $650M (0.5% GDP) mining target by 2027 is the largest single-sector revenue commitment — delivery depends on concession operationalization that has historically lagged.
• Credit note cash-floor compliance. May 2026 implementation of the 60/40 rule will test corporate liquidity positions, particularly in agriculture and manufacturing where credit-note reliance is highest.
• Election-cycle constraint. Calderón's observation holds: further unpopular measures face a narrowing political window.

Source: Primicias