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Ecuador's VAT Tax Drops from 14% to 12%

As of June 1st., according to the Solidarity Law, products taxed at 14% of value added tax (VAT) returned to 12%, which means a reduction of 2 points since the government increased the tax for a period of one year following last year´s earthquake.

Most businesses have started to do price adjustments for the lower VAT on product labels and cash register computer systems.   This process will be monitored by tax agents that will be conducting price-checks in the country´s stores to make sure consumers pay the new tax and that unscrupulous merchants don’t pocket the two percent tax differential.

With this 2% VAT reduction, merchants prepared with promotions to attract more customers and we will expect sales at all levels to gradually improve.

Bureau Veritas, ISO Certificate No. US011293
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