Ecuador Hit by Tax Hike Following Earthquake

Ecuador President Rafael Correa said that he's increasing sales tax and will be putting levy on millionaires to help the nation in its reconstruction after the massive earthquake.

Ecuador was hit by 7.8 magnitude earthquake, which Correa said has caused billions of dollars of damage.  The OPEC nation is already suffering from major economic crisis due to plummeting of world oil prices, with the International Monetary Fund, predicting a downfall of 4.5 % in its economy, Herald Courier reported.  On Wednesday, Correa warned that Ecuador will be facing a long and expensive post-earthquake recovery.

"I know we're at the most-difficult stage right now but it's just the beginning," he said in the televised address.

After the earthquake on Saturday, Correa declared that the sales tax would increase from 12% to 14% starting next year, ABC News Go reports.  He also announced that people in Ecuador with earnings of over $1 million in assets will be levied with a one-time tax of 0.9%; those with more than $1,000 a month income must give a day's wages; and people whose earnings are $5,000 a month must contribute their five-day earnings. Companies' tax will also increase, he added.  A plan to sell some of Ecuador's assets was also mentioned by the president.  He is also planning to get $600 million from the World Bank and other lenders.

"Rebuilding the affected areas will take years and cost millions of dollars," he added. "The short term costs are significant."

Ecuador's tax hike came at the time the nation is still facing a gruesome death toll caused by the earthquake, Times Colonist claims.  On the same day, the death toll was declared 570, which is higher than the records of casualties in Chile and Peru. Officials claimed that there were 163 people missing, while the number of homeless reached 23,500. A magnitude-6.1 aftershock was felt on Wednesday, sending the residents in more state of shock and devastation.

Ecuador is receiving financial and support from various sectors in the world. However, the distribution among the people has been slow. Water and communication remain the major problems in the country.

Tags

Ecuador President Rafael Correa, Ecuador, Ecuador earthquake, Ecuador tax sales increase, Ecuador death toll in earthquake

© 2023 Lawyer Herald All rights reserved. Do not reproduce without permission.