Correa shocks the nation by temporarily withdrawing tax increase proposals; cites the need for public debate and discussion, and the threat of violence

Jun 16, 2015 | 7 comments

In a stunning reversal, President Rafael Correa announced Monday night that he is withdrawing his proposals for inheritance and capital gains tax increases. He says the proposals will be resubmitted to the National Assembly but only after there has been a “thorough public debate and discussion.”

Rafeal Correa speaking Monday at the President Palace in Quito.

Rafeal Correa speaking Monday morning at the President Palace in Quito.

He said that the proposals could change as a result of the debate.

Correa also said his decision to withdraw the proposals was the result of concerns about violence in the protests in Quito, Guayaquil, Cuenca and other cities. “We want debate, not shouting,” he said. “We want honest and complete discussion about the issues of these tax proposals, not manipulation and intimidation,” he said.

He said he believed that at the end of the debate “the truth will prevail and the lies of some of the opposition will be fully revealed.” He added, “We are not in a rush with this process. We can wait.”

Earlier in the day, speaking from the balcony of the presidential palace in Quito, he had challenged those leading the protests to try to remove him from office through a public referendum.

Since he first announced the taxes, Correa and his Alianza Pais party have backpedaled on the rates proposed three weeks ago. The original inheritance tax proposed to tax all inheritances over $859,000 at a rate of 77.5 percent, which has since been reduced to 47.5 percent. Capital gains, under the original plan, were to be taxed across the board at higher rates but Correa later said it will not affect most homeowners, only those involved in speculation.

During his morning speech, Correa also claimed that protesters have resorted to violence. “The opposition cannot control itself. If they want to oppose the government peacefully, this is fine, but we will not tolerate violent actions,” he said.

Instead of using violence, he challenged the opposition to try to remove him from office by a public vote. “They will never succeed,” he said. “We will defeat them a thousand times if necessary.”

 

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