Noboa stops money exit tax reduction; City bus owners want a fare hike; Indigenous protest stops oil production; Expat arrested in road rage incident

Dec 30, 2023 | 0 comments

The Foreign Exchange Exit Tax (ISD) will remain at 3.5% and will not drop to 2% on December 31, as planned by former President Guillermo Lasso. President Daniel Noboa said Thursday he is “pausing” further reductions in the tax as a result of Ecuador’s budget crisis. The ISD applies to all funds over $1,000 transferred out of Ecuadorian banks and financial cooperatives.

Lasso had pledged to eliminate the ISD tax during his term but was forced to leave office after serving two years and six months due his cross-death proclamation that mandated new elections.

Although Noboa agrees the ISD should be reduced or eliminated, he says now is not the time. “Given current fiscal circumstances, we cannot afford to eliminate any tax revenue. We will maintain the 3.5% rate until further notice.”

A Petroecuador processing facility in Esmeraldas.

City bus owners want a fare hike
Cuenca’s municipal bus companies say fares should increase in 2024 to catch up with inflation, which they say has amounted to 14% since the current fare of 30 cents was established in 2018. Diego Idrovo, president of the Cuenca Chamber of Transportation, says some city officials and cantonal council members agree that an increase is justified.

According to Idrovo, other cities, including Quito and Guayaquil, have increased fares to 35 cents. “It is time the municipality realize the impact inflation has had on our operations, as well as the reduction of ridership due to the Covid pandemic.”

Although Cuenca bus passengers currently pay 30 cents per ride, the city provides an additional 5-cent subsidy to owners.

Indigenous protest stops oil production
Ecuador’s state-run oil company, Petroecuador, has declared force majeure on three more oil blocks due to protests by the indigenous Kichwa community, just days after doing the same for another block. The move protects Petroecuador from legal actions by contractors for failure to deliver. The three blocks were jointly producing a total of about 142,000 barrels of oil per day before falling to about 122,500 on Monday.

The indigenous community has accused the company of breaching agreements, although Petroecuador has said it remains open to dialogue. Petroecuador produced just over 362,000 barrels of oil on Monday, down from the November average of 420,000 barrels.

The latest development comes as yet another blow to the country’s beleaguered oil and gas sector, Earlier in the year, Ecuador’s energy minister Fernando Santos said that fuel imports have surpassed exports for the first time in more than 50 years.

Four successive governments have promised to increase daily production to 600,000 or 700,000 barrels per day but none has succeeded, due in part to protests from indigenous communities.

in August, Ecuadorians voted to end oil production in Yasuni National Park, home to the Tagaeri and Taromenani people who live in self-isolation. Yasuni, designated a world biosphere reserve by UNESCO in 1989, encompasses a surface area of over one million hectares (2.5 million acres). The Yasuni fields produce about 10% of the country’s oil.

Expat arrested in road rage incident
A U.S. citizen and permanent Ecuador resident was arrested Thursday morning in what transit police call a “case of road rage” at the Av. Las Americas and Gran Colombia redondel on Cuenca’s west side. John Allen M. was taken into custody following a brief altercation with police during which he was subdued with pepper spray.

Police say that John Allen M., who was driving a large pickup truck, forced a motorist and his wife off Av. Las Americas and onto the sidewalk in a right-of-way dispute. According to witnesses, John Allen M. pulled the unidentified driver out of his car and began hitting him. When the driver’s wife came to the man’s assistance, John Allen M. hit her in face and pulled her to the sidewalk by the hair.

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