Fiscal and budgetary implications of the increase in IVA in Ecuador

Abstract

Tax revenues represent an important item of tax revenue worldwide. The research is aimed at analyzing the fiscal and budgetary implications of the increase in the value added tax in Ecuador. The methodology used was oriented under the positivist paradigm, with a mixed qualitative and quantitative nature and a descriptive, explanatory and comparable approach. The results reflect that tax collection reflects significant growth in 2024 with partial data compared to 2023. The provinces that contribute the most are Pichincha and Guayas, although reductions are seen in the contributions of provinces such as Cañar, Bolívar and Chimborazo, this highlights the economic implications that the measure generates on vulnerable groups. Tax collection is directly related to state income, which suggests that the government depends representatively on these income where VAT collection is the main tax. Experts agree that the measure solves economic aspects in the short term, although it generates an impact on the vulnerable population and by itself is not enough to reduce the fiscal deficit that has remained in the country, it is necessary to adopt complementary measures and adequate management. and income distribution as well as expense optimization.