Latin America

Correa forced to delay new tax laws after major protests sweep Ecuador

Controversial fiscal measures will be delayed until after pope's visit, says president

An anti-government protest in Quito on Monday.
An anti-government protest in Quito on Monday.José Jácome (EFE)

Pressured by scores of anti-government protests over recent weeks, Ecuadorian President Rafael Correa announced on Monday night that he would “temporarily” delay new legislation that would raise inheritance and capital gains taxes.

The two controversial fiscal measures have sparked uproar across the country, with opponents arguing that the proposals would hurt families who are trying to improving their situations.

Correa said he was holding back on the measures because he didn’t want people protesting on the streets during Pope Francis’ upcoming two-day visit to Ecuador, which begins on July 8.

Opponents argue that proposals would hurt families who are trying to improve their lives

“In order to prevent these groups from causing more violence – especially when we are aiming for a peaceful, joyful and reflective environment during Pope Francis’ visit – I have decided to temporarily withdraw the bills,” he said during a televised broadcast, during which he wore the presidential sash – a symbol Correa usually doesn’t use when he addresses the nation.

Nevertheless, opponents said they will continue holding demonstrations, even during the papal visit.

Earlier in the evening, the leftist Ecuadorian leader addressed a group of supporters from the balcony of the Carondelet presidential palace to thank them for their support and to reaffirm that the bills were headed to the National Assembly.

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“All type of excessive accumulated wealth is unfair and immoral, and we will fight against it. These people and their leaders are not defending the poor [...] they are defending their pockets,” he said.

In some of the biggest anti-government demonstrations held since Correa came to office in 2007, thousands began taking to the streets on June 8 in Quito, Guayaquil and Cuenca.

Opponents believe that capital gains and inheritance taxes would hurt families who are trying to succeed with their own businesses, or who have been left with money or property by a loved one.

Correa explained that the bills will be delayed “until a national debate is over,” which “in time” will unmask the “lies” of opposition leaders.

But his political rivals are not satisfied with the president’s decision.

The bills will be delayed “until a national debate is over,” which “in time” will unmask the “lies” of opposition, says Correa

Blasco Peñaherrera Solah, former Chamber of Commerce president, called the move “a ploy” by Correa, and stated that protests will continue.

“The call for demonstrations is stronger than before, and not just because of these two laws. There will be a demonstration to show our total rejection of nine years of basic citizens’ rights violations,” he said.

Meanwhile, some of the country’s biggest unions also called for a march on Thursday.

“We are not just against the inheritance tax laws but also against its amendments, labor laws and the high cost of living,” said Mario Morales of the Free Workers Federation of Pichincha (Fetralpi) union.

Correa has promised to shelve the proposals for good “if someone shows me that the laws will affect the poor and middle class.”

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