We do have many very constructive entrepreneurs
INTERVIEW: Ximena Amoroso, directora general del Servicio de Rentas Internas
SRI aims to raise more than $ 14,000 million in taxes in 2015, next year this figure would fall.
Economics Bureau
More than a thousand daily queries are recorded on the on-line tax calculators on inheritance and capital gains, enabled on the website of the Internal Revenue Service (SRI).
Ximena Amoroso, general director of the institution, talks about the importance of tax on inheritances to reduce gaps in inequality. The bill sent to the National Assembly seeks ways to eliminate tax evasion.
Why is it necessary to establish a tax on inheritances?
In Ecuador Inheritance Law has been in force since 1927. Currently we have a progressive rate that reaches 35% and has a tax-exempt range of about $ 68,000. What it does is to generate a tax at the time of death of a person, that is, when you go to transfer an inheritance. Each heir, depending on what is assigned, comes to SRI and checks if it exceeds the tax-exempt range of inheritance. Those who do should pay a sliding scale, ranging from 5%.
What is sought with this tax?
An inheritance tax is to generate redistribution and attempts to break accumulation structures that have been given historically. In 2014 we raised about $ 10 million for this purpose. 2% of people in the country pay the inheritance tax annually. In the last five years, on average, 5 people received more than $ 1 million inheritance. The billed project was sent to the Assembly, aims to eliminate all possible gaps of evasion. It does not make any changes of fee, or tax-exempt rates.
What areas of evasion have been detected?
We found several issues, mainly to do with trusts. They are instruments that have existed many years. The trusts themselves are not a bad notion, its not that they should not be used, the problem is when it is wrongly used.
How does a trust work?
It is when an owner grants his assets to have someone else manage them, and a third party will benefit from this arrangement. In Spain, frauds mount up to about $ 431 million, soley by this concept. Countries like France, Brazil, Chile, UK, Spain, Uruguay and the United States, in some fashion, have stipulated in its norms ways to prevent these forms of trusts, foreign foundations, or donation dividing.
How many trusts are there?
In 2014 nearly 3,256 registered trusts. Of the $ 8,200 million contributed in trusts, $ 3,700 million are related to trust managements. In relation to the contributions given to these estates 57% is cash, 27% is in real estate and 8% are rights to shares. Trusts can last up to 100 years. Such that these may transcend generations.
How did the state act?
We will generate (with the law) the concept of "presumption" of inheritance. That is, when the trust ownser passes, we (the State) understand that real estate that is here will be under the presumption of inheritance to beneficiaries related to this person. I have met with great entrepreneurs who have large estates, and in some way, they agree. In this country we do have many very constructive entrepreneurs.
Where will the reserves be alloted?
The proceeds of this tax will go to scholarships for higher education for indigenous peoples, Afro-Ecuadorians and montubios. This tax does aims to close that structural gap that exists in the accumulation of wealth of a country, to transfer to those groups of society that somehow have become disenfranshised of opportunities.
On another topic, tax collection is reduced in 2016's budget projections, could we fall into recession?
All that is being projected for revenue collection in 2016, forecasts, precisely the distinct behaviors of economic activities. Not only do we assume growth and inflation, but we make a projection for economic activity, by types of taxpayers, even sizes. We do a technical study analyzing variables and data, allowing us to meet our goals. We are about 97% of the fulfillment of the goal today.
The SRI (IRS) expects to raise in 2016 about $ 509 million less than the amount estimated for 2015 ($ 14,099,000). How is the collection (coming along)?
We have an increase of over 176% in the last 8 years. This change has made Ecuadorians able to collaborate with the states general budget. Prior to 2006, 3 out of 10 Ecuadorians paid their taxes on time, today they are 8 out of 10. This means that the main shareholders of the country are Ecuadorians. Our money goes to schools, road, health and safety issues. We started in 2006 with approximately 600,000 active contributors, today there are now near 1'700.000 persons. (I)
Translation: Luis Castro
Source: http://www.telegrafo.com.ec/economia/item/existen-empresarios-muy-constructivos.html
Photo: Ximena Amoroso, directora general del Servicio de Rentas Internas. Foto: Miguel Jiménez/El Telégrafo