Ecuador Taxing Strategic Imports

Quito, Jan 23 (Prensa Latina) Ecuador began limiting import of 650 products aimed at equalizing the trade balance and halting the exodus of foreign currency after a drop of its earnings from oil.

The measure decided in past days with the business sector establishes an increase of taxes from 30 to 35 percent for articles, imported fruits and food, aimed at limiting these purchases.

This that is temporary, allows the country from having to spend 1.459 billion dollars and also to search for an increase of its exports allowing access to a liquidity of its finances, pointed out the Economics coordinator, Diego Borja.

Perfumes, alcoholic beverages, biscuits, toys, disposable diapers, pencils, notebooks, markers, cosmetics, cellular phones, shoes, clothing and car parts now are charged 30 to 35 percent in taxes, informed the Official Gazette in its Thursday issue. Added to the list are products such as sanitary napkins, fruits and creams, among others.

In addition to raising taxes the government place a 65 percent limit on the import of cars, electric appliance and other equipment.

This measure that will be applied for one year generates uncertainties among the retail businesses with the announcement of an increase in price of articles added to the higher taxes.

The government also announced that it began a publicity campaign to boost public consumption of national products to stimulate local production.

President Rafael Correa pointed out a few days ago that the decision was made to guarantee the necessary revenue for the economy and prevent an excessive loss of foreign currency.

The Industry minister, Xavier Abad, stressed that the taxes set are absolutely reasonable and announced a strengthening of controls to prevent contraband.

Abad denied a possible shortage of the internal market since, by limiting purchases, local production is boosted.