Ecuadorian President Lenin Moreno announced an end to government subsidies for holding down fuel prices and said Tuesday night that he will send congress a proposal to overhaul taxes and labor rules as a way to revitalize the economy.
In an address broadcast on television and radio, Moreno said he was eliminating the $1.3 billion subsidy for gasoline and diesel. The move will raise the price of gasoline to $2.30 a gallon from $1.85 and the cost of diesel to $2.27 from $1.03.
He said a tax overhaul bill that he would send to the National Assembly within hours would include a provision for a three-year special tax on companies with annual revenue above $10 million. The extra money would go to education, health and safety, he said.
Moreno said the proposal also would provide for reducing taxes on technological and cellular equipment, machinery and industrial equipment for simplifying refunds for exporters that pay foreign trade taxes. To stimulate the creation of jobs, he said he is proposing a new law to make hiring easier, encourage facilities for telework and help those who start businesses.
"The goal is more work, more entrepreneurship and better opportunities ... boosting economic growth and employment," the president said.
Moreno also announced that government employees will be required to contribute a day's pay each month to state coffers on the grounds that they receive higher pay than workers in the private sector.
Ecuador is experiencing economic problems arising from the high public indebtedness inherited from the 2007-2017 administration of President Rafael Correa. Moreno has sought credit with international agencies, especially the International Monetary Fund.
