Ecuador announces tax increase to fund quake recovery

Quito:Ecuadorian President Rafael Correa has announced temporary tax increases to fund the recovery of areas affected by the earthquake that struck the northern coast of the country that killed 570 people.

The president on Wednesday said that in the coming hours a two-point increase will be decreed in value added tax (VAT) for a year, and a one-off 3 percent additional contribution on profits will also be decreed, EFE news reported. A one-time tax of 0.9 percent will be charged to “people with more than $1 million in assets”, while workers will be required to contribute a day’s worth of their monthly wages to the recovery efforts for a period of time based on their earnings.

“If you earn $1,000 (a month), your one-day wage will be deducted from your paycheck for just one month, if you earn $2,000, you will contribute your one-day wage for two months, and for those who earn more than $5,000, you will have to contribute your one-day wage for five months,” said the president.

Correa said he will also look to sell some of the “many assets” possessed by the state. The measures are being imposed “according to what the Constitution allows when state of emergency is declared,” he said.

Ecuador declared a state of emergency on the night of April 16, hours after the 7.8-magnitude quake struck, leaving at least 570 people dead, some 5,733 injured, and another 163 missing.