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Ecuador: more expensive and less competitive with VAT increase

Quito, Feb 28 (Prensa Latina) For economist Marcos Flores, the increase of the Value Added Tax (VAT) in Ecuador reduces the purchasing power of income and makes the country more expensive and less competitive.

In his social network X, Flores, also former Minister of Economy of Ecuador, presented an analysis of this measure proposed by President Daniel Noboa and that will begin to be implemented here from next April.

According to the expert, with the increase of the VAT to 15 percent, the poor and people with lower incomes will be the most affected, since the prices of goods and services will increase even before the new percentage increase begins to be charged as a result of a speculative process, he explained.

If it is later decided to reduce the VAT, the prices of goods and services will remain high, they will not be reduced, only by exception. The damage is already done, prices are always inflexible downwards, Flores warned.

Likewise, the Ecuadorian economist warned that consumption represents more than 80 percent of the Gross Domestic Product (GDP) in Ecuador and VAT -he said- is a consumption tax and has been increased in the midst of economic slowdown.