The Ecuadorian State owes USD 140 million to the country’s municipalities

The delegate of the Association of Municipalities of Ecuador (AME), Alex Rojas, declared in the Commission of the Economic Regime of the National Assembly that the state must return USD 140 million of the Value Added Tax (VAT) to the municipalities

“We know that the Ministry (of Finance) must deliver these resources to the Decentralized Autonomous Governments (GAD) until January 2, but it does not do so and that generates delays, such as in the payment of salaries,” said Rojas.

On the other hand, the representative stated that AME is demanding the payment of a debt from the previous year; But, he pointed out that the Ministry of Finance does not consider the securities as a debt.

Rojas stressed that the small municipalities are the most affected: “There are municipalities on the coast that do not have to pay salaries, that have embargoes.” The representative clarified that “every dollar” that the Ministry of Finance has is necessary.

On the other hand, Assemblyman Diego Ordóñez, belonging to the CREO-ADE Alliance, said that it must be established if there is a debt with the municipalities, because the reduction corresponds to a calculation, so it is necessary to consider whether the values ​​are real or symbolic.

In response to Ordóñez, Olga Núñez, undersecretary of the Finance technical team, said that the debt with the municipalities for the VAT refund is real and that it is ordered by the Constitutional Court:

“The GADs will not have to pay VAT to the SRI (…) the state will have to pay until January all the debt for VAT refund, these values ​​are pending in the treasury”, declared Núñez

The origin of the debt would come from non-socialized ministerial agreements, which are 49 and 72. Which compromised the liquidity of the GADs, according to the AME delegate.

On the other hand, the undersecretary clarified that the GADs receive 21% of the permanent income and 10% of the oil income. In addition, the management of VAT values ​​will allow them a saving of 300 million; In this way, the GADs will receive a budget of USD 3 317 million.

However, Rojas said that according to the Equity Model, the proforma provides for the Decentralized Autonomous Governments (GAD) USD 2,827.90 million. However, only USD 1 894.70 million goes to the municipalities. The rest goes to other entities.