Effects of the exit of foreign currency tax in the importing industrial sector of Riobamba, Ecuador

Abstract

This research analyzes the effects of tax imposed on capital flight in the industrial import sector of Riobamba – Ecuador. The Ecuadorian government imposes taxes on capital flight to protect the economy from capital outflow. The aim of the research is to determine the appropriate use of tax money to optimize business resources. Data collection and analysis of the current corporate structure led to a financial diagnosis of the companies. Besides a comparative analysis on the use of tax money according to current regulations was made in order to disclose the effects on companies’ profitability. The results show that using this tax as a credit is the best option for the taxpayer.

Keywords

• tax credit
• capital flight
• taxes
• liquidity
• profitability
• exit of foreign currency