Analysis of the Tax on Foreign Exchange Outflow during the period 2008–2022

Abstract

The objective of this study was to analyze the different stages of implementation and reform of the Foreign Exchange Exit Tax (ISD) in Ecuador during the period between 2008 and 2022. The research methodology adopted combines an exhaustive documentary review with a mixed approach that It integrates quantitative and qualitative elements within the framework of descriptive and explanatory research. The results of the study reveal that ISD collection is made up mostly of declarations of transfers abroad, while declarations of payments from abroad and foreign exchange outflows in exports represent a much smaller percentage. Furthermore, it is evident that the ISD has not managed to stop capital flight, and its impact on foreign direct investment is limited. Political and tax instability in Ecuador is pointed out as one of the causes of this situation. In conclusion, the capital outflow tax has generated diverse opinions regarding its impact on the Ecuadorian economy. While some defend its benefits in terms of protecting the local economy and financial stability, others argue that it could discourage foreign investment and affect the country's international competitiveness. The implementation and reform of the ISD in Ecuador is a complex issue that continues to be the subject of debate and analysis.

Keywords: ISD, exports, tax, PBI, foreign exchange, foreign investment.