The Economic Commission has approved the proposal to promote competitiveness and employment in the textile sector economy

With eight votes in favor and six votes against, the Republican Congressional Economic Commission has proposed “Act to Promote Competitiveness and Employment in the Textile and Apparel Industries and to Promote Their Economic Revitalization.”

Cesar Revilla Villanueva, president of the commission, said the purpose of the ruling is to promote competitiveness and employment in the textile and apparel sectors, and to promote economic restructuring, sustainable development and restructuring internationally.

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The plan also proposes to establish, on an exceptional and temporary basis, a tax credit scheme for reinvesting 50% of profits on the amount reinvested in infrastructure, machinery and equipment aimed at improving processes. Up to 50% will be applied against the income tax assessed in the relevant financial year.

During the debate, Congressman Victor Flores from the Fursa Popular Bench presented a proposal to amend the fourth opinion. “To facilitate and simplify the extension of benefit and to avoid oversight by the Administrator and may be issued before the end of the year”He commented.

Considering the proposal, parliamentarians Elias Varas, Alex Paredes and German Daghuri requested the postponement of the vote to study the amendment.

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Meanwhile, Congressman Carlos Anderson noted that while the ruling may seem reasonable in terms of hiring new workers and rapid depreciation of assets, it is not in terms of reinvesting profits.

“Reinvestment of Profits (…) This leads to distortion because business decisions about investment must be guided by expectations of a certain return on investment. The problem with investment incentives is that they distort the rate of return, causing resources devoted to more profitable uses to be devoted to less profitable ones.He explained.

Despite the comments, the plenary session of the Congress approved the debate.