Ecuador's growers could receive tax credits
With no commitments from the U.S. to renew the Andean Trade Promotion and Drug Eradication Act (ATPDEA) in sight, Ecuador's government has proposed a system of tax credits for exporters, to be reviewed by the country's Board of Trade today.
The expiration of the agreement has meant increased tariffs for Ecuador's exporters, but the government aims to cover at least part of that cost with the tax credit scheme, website Eluniverso.com reported.
Minister for Production Nathalie Cely told the website the tax credit levels would be different for each industry and could likely be traded by different businesses.
"For each sector the cap could be between 50% and 60% as a maximum, and the remaining 40% would be borne by the productive sector, so it can pass the WTO rules, because it is a co-financing plan to improve the competitive structure," she was quoted as saying.
Levels of U.S. competition, the impacts of tariffs on competition, the diversification of markets and products, and profitability will all be taken into account to determine tax credit rates for different businesses, the story reported.
It is expected the estimated state cost for the tax credits will be up to US$25 million, with exporters needing to submit certification of duty payments to access the facility, reported El Universo.
The website has also revealed embassy cables showing concerns from the U.S. over Ecuador's relations with Iran.
Related story: Colombia and Ecuador hit by U.S. tariffs
Photo: El Ciudadano