Impact of the increase in Value Added Tax on the Ecuadorian economy during the period 2024 – 2025.

Abstract

In 2024, the Government of Ecuador increased the Value Added Tax (VAT) as part of a strategy to strengthen tax revenue and reduce the public finance deficit. This measure generated widespread debate surrounding its potential effects on the national economy, particularly on variables such as inflation, household consumption, private investment, and economic growth. This article aims to analyze the impact of the VAT increase on the Ecuadorian economy during the period 2024–2025 by studying relevant macroeconomic indicators. The research adopts a quantitative approach with a non-experimental design, based on the comparative analysis of data from national economic agencies and a public opinion survey, using a sample study. From a theoretical perspective, the study is grounded in theories of tax incidence, aggregate demand, and the relationship between taxation and economic growth. The results indicate that, while the VAT increase contributes to strengthening tax revenue in the short term, it also generated moderate inflationary pressures and effects on domestic consumption. It is important to recognize that the VAT increase has positive fiscal implications, although its economic effects require comprehensive evaluation to ensure sustainability and macroeconomic stability.