Moreno’s new tax on wages gets pushback; New Covid-19 cases plummet over the weekend; Patients, staff infected at cancer hospital

Apr 13, 2020 | 34 comments

President Lenin Moreno’s plan to tax worker’s income to help small businesses and the poor has run into opposition from labor and business groups as well as some members of the National Assembly. Announced Friday night as part of the fight against the Covid-19 virus, the National Humanitarian Assistance Account would be funded by all wage earners making $500 or more a month.

President Lenin Moreno

On Sunday, Moreno ordered a 50 percent reduction in pay for all members of the executive branch of government, including himself, the vice president, ministers and provincial governors, program directors and other high-salaried employees. In addition, Moreno said the order also applies to the National Assembly, the Constitutional Court and the Council for Citizen Participation, which drew questions from some about the president’s authority beyond the executive branch.

Moreno said legislation to tax private sector workers will be sent to the National Assembly Monday morning.

On Sunday, the country’s labor unions insisted that they be part of discussions to determine the tax on workers’ wages. “We understand the need to sacrifice but we resent being left out of the decision-making process,” said Nelson Erazo, president of the Popular Workers Front. “In particular we disagree strongly with taxing those who make only $500.” He suggested that taxes begin at $714, the amount the government says is necessary to cover basic living costs.

The United Workers Front also objected to the plan, saying it was not consulted before Moreno announced it. “We believe the order is unconstitutional and unfairly targets the poorest workers,” the union said in a statement, adding that the most wealthy should carry the burden of the tax.

The United Workers and Popular Front both insisted that the government stop payments on foreign debt during the health crisis and apply those funds to the health emergency.

Although it says it supports the intent of the National Humanitarian Assistance Fund, the Ecuador Chamber of Commerce also questioned the fact it was not involved in discussions to formulate the plan. In a Sunday statement, the chamber said that 83 percent of Ecuadorians work in the private sector and that representatives of the business sector should be “a central part of the effort” to protect Ecuadorian businesses and jobs.

Finance Minister Richard Martinez responded to complaints, insisting that many of the objections will be addressed in National Assembly debate. “There will be time to work out the details,” he said. “Our intent is to make the humanitarian account totally transparent and for all sides to have input.”

Martinez said the primary intent of the plan is to preserve jobs and the small businesses that supply most of them. “We must also protect the most vulnerable members of our society,” he added.

According to a table released by the government Sunday, the tax on salaries is graduated, beginning at $2 a month for those who make between $500 and $600. Those making $10,000 a month would pay $1,002.

Virus update

New virus cases drop over the weekend
After increasing by a one-day record of 2,196 on Friday, Ecuador’s confirmed cases of Covid-19 climbed by 305 over the weekend to 7,466 — 96 on Saturday and 209 on Sunday. In a Tweet, Health Minister Juan Carlos Zevallos said that the drop was mostly the result of fewer test results but said he expects to see an overall “flattening of the curve” in the coming days. “Our preventive measures are beginning to show good results,” he said.

In Sunday’s virus report, Guayas Province registered 5,381 cases while Pichincha reports 627, Los Ríos has 239 and Azuay has 178 cases, 158 of them are in Cuenca. The death toll stood at 333. Zevallos said that 24,635 tests have been administered nationwide.

City uses holiday budget funds to fight Covid-19
Cuenca Mayor Pedro Palacios said he is reallocating $115,000 budgeted for Cuenca foundation holiday events to efforts to combat the coronavirus. “We need the money now to provide food kits for the poor and to buy protective equipment for city workers,” he said. Last week, Palacios moved more than one million dollars from the public works budget to the anti-virus fund. So far, he said, the city has purchased 1,200 protective suits and 12,000 masks and fumigated 325 kilometers of city streets and roads.

Azuay Province Prefect Yaku Pérez

Azuay Province Prefect Yaku Pérez agreed with Palacios’ decision to transfer holiday funding to the Covid-19 fight. “I never understood why we celebrated the Spanish foundation anyway,” he said. “Why celebrate and then, six months later, we celebrate kicking them out of town?” He added that Cuenca was actually founded three times, first by the Cañaris, then by the Inca before the Spanish arrived.

Patients and staff infected at cancer hospital
Cuenca’s cancer hospital, SOLCA, reports that two patients, two nurses and two doctors have tested positive for coronavirus. Hospital Director Raúl Alvarado said that other patients and staff at the hospital are being tested to determine if the infection has spread. “This is particularly serious given the fact that many of the patients have undergone treatments that weaken their auto-immune systems so we are going to extra lengths to protect patients as well as our staff.” Alvarado said that one of the patients who tested positive is recovering and will be discharged this week.

Crackdown on street vendors planned
Cuenca markets director Marcelo Álvarez says police patrols to stop informal food sales in areas near city markets will be increased this week. “These sellers do not have permits so they infringe on the rights of those who do,” he said. “In addition, most of them are not following the biosecurity measures, such as wearing masks and gloves, so they are a danger to public health during the emergency.

New traffic light system starts red
The traffic light system that determines the applicability of rules and restrictions of the Covid-19 health emergency is flashing red for the week of April 13, meaning all rules and restrictions remain in full force. Announced last week by Interior Minister María Paula Romo, the system will be updated on a weekly basis, with yellow or green lights indicating a relaxation or suspension of rules.

248 police and military personnel have contracted Covid-19
Since the national health emergency was declared March 14, 248 police and soldiers have been infected according to testing. The interior ministry says many more have probably contracted the virus but have not been tested. About half of the 248 are recovering from the virus, most of them at home, the ministry says.


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