2024-04-02 23:48:31
A few hours after the coming into force of the New Rates of the Value Added Tax (VAT), the Internal Revenue Service (SRI) established the list of Construction materials that starting this Monday, April 1, 2024, they will have VAT at 5%.
The resolution details 18 types of products among which are:
- Rods of eight, 10 and 12 millimeters
- Cement
- Arena
- Limestone
- Blocks
- Cobblestones
- Bricks
Small producers sell the blocks in the factory for USD 0.36 cents per unit. With the VAT reduced to 5%, The value can drop to USD 0.32 cents.
The reduction is part of the Law to finance the armed conflict
Producers are waiting for the new rate to boost the construction sector. However, they warn that there are other elements to take into account and they remain cautious.
«Transportation, obviously, does not tax VAT. But, if fuel increases, the cost of freight will increase,” Christian Encalada, producer of precast concrete, told Ecuavisa.
Suppliers must adjust to the new rates from April 1st. This, without prejudice to the fact that they purchased the products with 12% VAT.
“Due to the rate change we have, they will have to sell only and exclusively with 5% (VAT),” warned Jael Fierro, tax expert.
The resolution was made to comply with provisions of the Law to face armed conflictapproved on March 12, which provided for the reduction of VAT on construction materials.