Ecuador hikes taxes in response to earthquake

International Tax Review is part of Legal Benchmarking Limited, 1-2 Paris Garden, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Ecuador hikes taxes in response to earthquake

Ecuador will increase VAT and implement a new profits surtax as temporary relief measures in response to the devastating earthquakes that hit the country this week.

President Rafael Correa announced that VAT will rise two percentage points from 12% to 14%, while a “one-off 3% additional contribution on profits” will also be levied.

The estimated $2 billion-plus in damage done by the 7.8 magnitude earthquake that struck on Saturday April 16, followed by a second earthquake on Wednesday April 20, adds to the country’s financial woes; the Ecuadorean economy had already been suffering from a reduction in oil revenues off the back of price volatility. But with 600 lives lost, thousands injured and much rebuilding to be done, it was clear that Correa needed to make temporary fiscal policy changes.

more across site & shared bottom lb ros

More from across our site

Further empowerment of HMRC enforcement has been praised, but the pre-Budget OBR leak was described as ‘shambolic’
Michel Braun of WTS Digital reviews ITR’s inaugural AI in tax event, and concludes that AI will enhance, not replace, the tax professional
The report is solid and balanced as it correctly underscores the ambitious institutional redesign that Brazil has undertaken in adopting a dual VAT model, experts tell ITR
The Brazilian law firm partner warns against going independent too early, considers the weight of political pressure, and tells ITR what makes tax cool
The lessons from Ireland are clear: selective, targeted, and credible fiscal incentives can unlock supply and investment
The ITR in-house award winner delves into his dramatic novelisation of tax transformation, and declares that 'tax doesn’t need AI right now'
Recent news of job cuts at EY is symptomatic of how the PwC controversy has tarnished the reputation of the entire ‘big four’
Experts reportedly discussed extending the safe harbour to 2027 to give countries more time to legislate; in other news, Baker McKenzie and Greenberg Traurig made senior tax hires
Awards
Submit your nominations to this year's WIBL Americas Awards by January 23
Recent changes in UK tax rules and cross-border requirements are generating high demand for specialist advice, according to MHA
Gift this article