Analysis of Taxation in Ecuador and its Contribution to the General State Budget (2021-2023)

Abstract

Taxation is crucial for the fiscal stability of a country, allowing it to finance public policies and social programs. In Ecuador, the tax system has undergone reforms between 2021 and 2023 to improve collection and reduce dependence on external financing, especially in the context of the economic crisis caused by the COVID-19 pandemic. This study evaluates the evolution of tax revenues and their impact on the general state budget (PGE), highlighting tax reforms and their effect on economic recovery. A qualitative methodology was used based on the review of academic literature and official sources, such as reports from the Ministry of Finance and the Internal Revenue Service (SRI). The results show that, between 2021 and 2022, there was a recovery in collection, driven mainly by the increase in VAT and Income Tax. However, tax evasion remains a major problem, accounting for approximately 30% of potential tax revenues. Although tax reforms have improved collection efficiency, structural challenges such as economic informality and a low tax culture persist. Ecuador remains vulnerable to economic fluctuations, underscoring the need for deeper fiscal reforms to diversify revenue sources. It is recommended to continue with reforms, reduce informality and improve tax education to guarantee long-term fiscal sustainability.