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New Tax for Ecuadorians Protects Few at the Expense of Many

By: Rebeca Morla - @RebecaMorla - Jul 24, 2014, 4:30 pm
President Rafael Correa of Ecuador
President Rafael Correa of Ecuador. (Wikimedia)

EspañolA new tax burden is set to join Ecuador’s already long list of trade restrictions. The Committee of Foreign Trade (Comex) announced in recent days that all online purchases will be taxed with a US$42 levy per pack, for those packages included in the “4 x 4 postal system,” (which allows shipments up to four kilograms or US$400). Books and Medicines will keep their tax-exempt status.

Until now, shipments through this system, created to simplify customs and taxes, were only charged a 5 percent tax (ISD) on foreign currency outflow. Now, in addition to the tax, the Comex-promoted reform will limit each person’s shipments per year to five or a cap of $1,200. In other words, an Ecuadorian will be allowed to purchase online only five times per year or until he reaches the $1,200 limit.

This measure comes in response to the complaints of several union groups, mainly from the shoe and textile industries. They denounce online shopping as “unfair competition against Ecuadorian industries and domestic competitors.”

This tax, just another way for the “Citizen Revolution” to seek protection for the domestic industries, causes more harm that is easily observed. The only ones “protected” by the measure are specific members of the shoe and textile industries, forcing the rest of Ecuadorians to pay unnecessarily high prices to support our “sovereign” industry.

Unfortunately, the measure will harm consumers who would rather pay national couriers — even with the ISD — to buy good-quality products at cheaper prices than those found locally. This “protection” also fails to consider the damage to national couriers, which will lose those clients resigned to shop in Ecuador.

It is here when we realize that sometimes — and, dare I say, almost always — instead of looking for the “common good” of the citizens, our politicians favor the few, as they enforce measures tailor-made to their special interests. When we hear public officials talking about “living the good life” and the now-famous “Ecuadorian miracle,” I wonder, who are those living the good life, those who were favored by that miracle?

Translated by Adam Dubove.

Rebeca Morla Rebeca Morla

Based in Guayaquil, Ecuador, Rebeca Morla works as an editorial assistant with the PanAm Post. She is a political scientist and an Executive Board member of EsLibertad. Follow @RebecaMorla.