Organic Law for Economic Development and Fiscal Sustainability

Ecuadors Organic Law for Economic Development and Fiscal Sustainability, enacted on December 20, 2021, aims to promote the sustainability of public finances, the reorganization of Ecuadors tax and fiscal system, and legal certainty for Ecuadors economic reactivation after having faced the COVID-19 pandemic. The law establishes measures that include an increase in tax revenues by broadening the tax base and combating tax evasion, a reduction in non-priority public spending to generate fiscal savings, and an improvement in the efficiency of public spending to optimize the use of public resources. It also establishes reforms to the Ecuadorian tax and fiscal system to make it more equitable, efficient and sustainable. The law provides guarantees for economic reactivation, such as investment facilities to attract foreign and domestic investment, measures to promote domestic production and reduce dependence on imports, and support for micro, small and medium-sized enterprises to promote their growth and development. It is an important instrument for promoting Ecuadors economic development and fiscal sustainability, with the potential to contribute to economic growth, increased investment and greater competitiveness. However, it faces challenges such as resistance to change and the need for effective implementation.