Ecuador’s new tax reform, proposed by President Guillermo Lasso, has been presented as an urgent economic project that must undergo analysis by the country’s congress. As per the Ecuadorian Constitution, the project must be processed within thirty days of its receipt.
The proposed tax reform by President Guillermo Lasso of Ecuador suggests the implementation of a singular tax for sports betting operators. The tax will be levied on both domestic and foreign betting platforms and also on prize values. As per the proposal, sports betting companies are liable to pay a 15% tax on their tax base, which is the total income minus prizes paid out.
In the case of a player placing a bet on a foreign platform, the player must pay 15% of the tax on the value of their bet at the time of placing it. The proposal needs to be evaluated and processed by the Ecuadorian Congress within 30 days of receiving it, as per the country’s constitution.
According to El Comercio, local media in Ecuador, the proposed tax reform also includes a 15 percent withholding on the value of players’ prizes. This withholding will be applied by the platform or institution responsible for accrediting the prize.
The reform is said to be justified by the presence of companies and individuals engaged in sports betting activities through digital platforms in Ecuador, as well as the identification of more than a dozen platforms that advertise in sporting events without a presence in Ecuador but still conduct transactions in the country.
According to the Internal Revenue Service (SRI) of Ecuador, there are at least 23 betting and forecasting sites operating in the country. The SRI also collects Value Added Tax (VAT) from online betting platforms.
The proposed tax reform would benefit around 340,000 taxpayers but would result in a loss of USD195m in tax revenue for the country’s treasury. During the project presentation, Lasso stated that “there are 195 million dollars that are going to stay in Ecuadorian homes to finance health, education or food expenses,” and urged the assembly members to consider the interests of citizens.
The reform proposal also allows taxpayers to deduct up to USD15,294 of their personal expenses per year, depending on the number of dependents, in order to lower their Income Tax.
This reform proposal coincides with opposition lawmakers pursuing impeachment proceedings against Lasso over allegations of embezzlement in an oil transportation contract, which the president denies.
