Policy & Regulation
Tax reform, legislation, fiscal policy
58 articlesSRI Limits Credit Note Use to 60% of Tax Obligations — 40% Cash Requirement Takes Effect May 1
Ecuador's tax authority has imposed a 60% cap on the use of credit notes to satisfy tax obligations, effective May 1. The remaining 40% — including any fines and interest — must be paid in cash through approved channels. Tax specialists argue the restriction exceeds the SRI's administrative authority and conflicts with the Tax Code.
Ecuador Cuts Tourism IVA to 8% for May Day Weekend via Decree 368 — Fiscal Stimulus for $2.3B Sector
President Noboa signed Executive Decree 368 on April 27, temporarily reducing the IVA from 15% to 8% on tourism services for the May Day long weekend (April 30–May 3). The measure covers accommodation, dining, tourist transport, vehicle rental, travel agencies, and events. The SRI is responsible for implementation.
Ecuador Average Worker Income Falls USD 46.60 Year-Over-Year to $429.50 — Below 2026 Minimum Wage
INEC's March 2026 labor survey shows average worker income dropped to USD 429.50 — below the USD 482 minimum wage and down USD 46.60 year-over-year. Precarious employment rose to 34.8%, while informal employment hit 56.3%.
Ecuador Expands 15% IVA to 60+ Food Products Under IMF Revenue Commitment — $1.5 Billion Target for 2026
An SRI circular dated March 26 applied Ecuador's 15% IVA to over 60 previously exempt food products, including imported lactose-free milk and fortified dairy. The measure is part of a $1.5 billion revenue increase committed to the IMF under Ecuador's $5 billion credit facility.
Two ADN Bills Propose Redirecting 0.5% Employer IESS Contribution to Secap — USD 100–120M Annually at Stake
Two Asamblea Nacional bills would restore Secap's pre-2015 dedicated funding by routing a 0.5% employer payroll contribution through IESS to the professional training agency. Historical throughput: USD 100–120 million annually. Status: both in committee review.
Nine-Province Curfew May 3-18 Imposes Overnight Operations Restructuring on Banana, Logistics, Manufacturing
Ecuador's May 3-18 curfew in nine provinces and four cantones — announced April 20 — will not allow sector-specific exemptions. Interior Minister John Reimberg publicly rejected a request from the Clúster Bananero del Ecuador for overnight operations carve-outs. Exporters, logistics operators, and manufacturers face 15 nights of forced restructuring.
Labor Ministry Targets May 1 Cut of "Visto Bueno" Dismissal Process from 120 Days to 30-45
Ecuador's Labor Ministry plans to reduce the "visto bueno" dismissal process from the current 80-120 day window to 30-45 days, effective May 1, 2026. The reform was originally proposed in December 2025 in consultation with both labor and employer groups. Employer dismissal timing and indemnification certainty improve materially.
Government Weighs 1-2 Month Extension of $177.5M Transport Fuel Compensation Program
Ecuador's government is evaluating a one- to two-month extension of the Decreto 306 fuel-subsidy compensation to roughly 57,000 transporters beyond April. Minister of Government Nataly Morillo confirmed $177.5 million has been allocated so far. Tariff-setting authority remains with municipal GADs, not the national government.
SRI Extends Tax Deadline to April 23 for RUC Digits 5/6 After April 20 System Failure — 283,413 Still Unfiled
Ecuador's tax authority SRI extended the April 20 filing deadline to April 23 for taxpayers whose RUC ninth digit is 5 or 6, citing platform intermittencies under peak load. The extension covers corporate income tax, monthly VAT, and currency-outflow tax. SRI separately reports 283,413 taxpayers nationally have not filed their 2025 income tax returns.
SRI Mandates Single-Step IVA Declaration + Payment Effective June 1, 2026
SRI announces VAT (IVA) declarations effective June 1, 2026 are valid only when filed simultaneously with full tax payment. Partial payment via credit notes invalidates the declaration. Exemptions limited to fiscal compensation system participants and qualifying direct exporters. Compliance and corporate treasury workflow change material for all RUC-registered taxpayers.
SRI Reports $267.2B in 2025 Sales (+9%), $21.5B in Tax Collection (+6.8%)
Ecuador's tax authority SRI reported 2025 economy-wide reported sales of $267.2 billion (+9% YoY) and tax collection of $21.5 billion (+6.8% YoY). Enforcement-generated revenue totaled $578.6 million, roughly 2.7% of collections. Digital channel usage hit 167 million portal visits and 3.5 million credentialed transactions.
Ecuador Finance Ministry Issues Directive for Debt Settlement Using Unproductive State Real Estate
Ecuador's Finance Ministry has published an operational directive allowing government debts to public and private creditors — including GADs and suppliers — to be settled using unproductive state real estate. The protocol requires signed dación de pago agreements, technical reports, and cadastral verification. Inmobiliar held 469 state properties as of December 2024.
Noboa Signals Openness to US Military Presence — Security and Investment Climate Implications
President Noboa's announcement that Ecuador would welcome US military troops to fight organized crime — provided they operate under Ecuadorian command — signals a deepening US-Ecuador security alignment. Joint operations are already active, including Pacific naval exercises with the USS Nimitz and a border strike against Comandos de la Frontera.
Ecuador-UAE BIT: Constitutional Court Blocks Fast-Track, Mandates Legislative Approval
Ecuador's Constitutional Court ruled unanimously (9-0) that President Noboa cannot fast-track the bilateral investment treaty with the UAE via executive decree. The ISDS provisions trigger mandatory legislative review under Article 419(7). The ruling adds delay and uncertainty to the UAE investment corridor and reinforces constitutional limits on executive authority in trade agreements.
CAF Launches Economic Forum 2026 in Quito — Signs Competitiveness Agreement with Ecuador
The Development Bank of Latin America (CAF) held a high-level event in Quito to formally launch the II International Economic Forum and the Latin America and Caribbean 2026 Business Roundtable. CAF simultaneously signed a non-reimbursable technical cooperation agreement with Ecuador focused on developing a new national competitiveness policy.
Labor Reform: Agreement 059 Allows 10-Hour Workdays — Mass Protests
Ecuador's Ministry of Labor issued Ministerial Agreement 059 on March 10, 2026, allowing employers and workers to redistribute the standard 40-hour workweek across fewer days with shifts of up to 10 hours. The measure has triggered mass protests in Quito led by CONAIE and labor unions, who characterize it as a rollback of worker protections. Business chambers have expressed cautious support, citing operational flexibility benefits for manufacturing and services sectors.
SRI Cracks Down on ISD Tax Evasion in Foreign-Financed Imports
Ecuador's tax authority (SRI) has intensified enforcement of the 5% Impuesto a la Salida de Divisas (ISD) on foreign-financed imports, targeting evasion schemes that have proliferated since the tax credit elimination in January 2025. The crackdown focuses on split-invoicing structures and offshore financing arrangements used to minimize or avoid the capital outflow tax. An estimated $150-$250 million in annual revenue is at stake.
SRI Clarifies: 94 of 115 Basic Basket Foods Retain 0% IVA
Ecuador's Internal Revenue Service (SRI) published a granular breakdown confirming that 94 of the 115 items in the national basic food basket (canasta básica) retain the 0% IVA treatment. Only 21 items — concentrated in processed and packaged categories — now carry the 15% IVA rate. The detailed classification reduces interpretation risk for retailers and provides a clearer framework for consumer price index modeling. Estimated CPI impact from the reclassification is contained at 0.3-0.5 percentage points.
CAPIA Elects Mónica Ortega Pacheco as President for 2026-2029 Term
The Azuay Small and Medium Industry Chamber (CAPIA) elected Mónica Ortega Pacheco as its new president for the 2026-2029 term, according to El Mercurio. The leadership transition occurs as Azuay province reports 22%+ sales growth in Q1 2026 — significantly outpacing national recovery rates. The SMI sector represents approximately 60% of Azuay's industrial employment and is a critical channel for workforce absorption in the southern highlands.
SRI Clarifies IVA on 60+ Processed Foods — Consumer Price Impact Analysis
Ecuador's Internal Revenue Service (SRI) issued a clarifying circular on March 26 confirming that approximately 60 processed food items now carry the standard 15% IVA rate. Affected categories include processed dairy, baked goods, pre-cooked proteins, instant noodles, and flavored beverages. Raw and natural food products maintain the 0% rate. Analysis of the reclassification suggests a 200-400 basis point margin compression for food retailers and a measurable upward pressure on Ecuador's consumer price index in the processed food segment.