Noboa notches first National Assembly victory with passage of economic reform law

President Daniel Noboa scored his first legislative victory Tuesday as the National Assembly passed his economic reform law. The win marks a sharp contrast with proposals by former president Guillermo Lasso which usually met with defeat in the Assembly.

President Daniel Noboa

Assembly President Henry Konfle hailed the passage of the Economic Efficiency and Employment Generation Act, saying it signaled a new spirit of cooperation. “We were all tired of the gridlock and inactions we saw in the last Assembly, and it is good to see the various factions working together,” he said. “This law is not perfect, and we have much more work to do to revitalize the economy but it is a good start.”

Konfle was part of the coalition that opposed most of Lasso’s economic proposals.

Among the major provisions of the new law is a requirement that large companies make monthly income tax payments instead of holding a lump sum payment until the end of the year. According to Noboa and Konfle, the change will improve government cash flow. The requirement affects about 500 corporations, according to Ecuador’s internal revenue service.

Among other provisions of the law provides tax breaks for companies hiring new employees, particularly young people and recent university graduates.

Other tax breaks are given to companies that donate equipment and supplies to the National Police. According to Noboa, the intent is to generate increased support for law enforcement and to develop stronger working relationships between businesses and police.

Another provision of the law offers forgiveness of interest and penalties for individuals and companies who pay back taxes. The wording of the provision was changed to exclude former presidents and their families. Noboa’s father, so-called “banana baron” Alvaro Noboa, owes the government an estimate $100 million in interest and penalties. The president claims to be estranged from his father due to political differences and says he supports all efforts to collect money owed.