Alvaro Noboa

Press Release

STATEMENTS BY THE DIRECTOR GENERAL OF THE INTERNAL REVENUE SERVICE, CARLOS MARX, ARE FALSE, GIVEN THAT THE ACTION OF TRIBUTARY DETERMINATION DICTATED BY THE SECOND COURT OF THE FISCAL TRIBUNAL AGAINST THE EXPORTADORA BANANERO NOBOA S.A. HAS NOT BEEN EXECUTED. THEREFORE IT IS IMPOSSIBLE TO COLLECT THE TAXES THAT HE SUPPOSES THE NOBOA BANANA EXPORTERS S.A. OWES.

In his public statements, the Director General of Revenues has indicated that the Tributary Determination Action corresponding to 2005 has been executed by virtue of the Court Order dictated on the 11 of this current month by a Judge of the Second Court of the Fiscal Tribunal, an erroneous affirmation given this procedural action has still not been executed, and for that to occur, three days have to have passed from the date in which it was dictated and notified, and besides which, no appeal or petition has been presented. Therefore, the statements of the Director General of the Internal Revenue Service, that he will immediately begin collecting the taxes that he supposes are owed by Exportadora Bananero Noboa S.A., are completely out of order judicially and threaten the constitutional guarantees of due process and due protection.

At the same time, it is necessary that the Director General of the Internal Revenue Service explain to the country why, during the process of determining taxes for the 2005 tax year, in regards to the adjustments for transfer prices, he did not consider all the values that are included in the wholesale market price published in the database of the United States Department of Agriculture, which he used as a reference to establish the adjustment for $226,288,017.83, and which are insurance, actual transport, unloading of fruit from the ship, loading of fruit onto transport trucks from the port to the ripening centers, cost of ripening in special rooms, cost of transport of the fruit from the from the ripening centers to the supermarkets, existing costs in the commercialization of banana, so as to obtain the CIF price, which is what the Internal Revenue Service was looking for, in order to compare it with the FOB price, which is that of sale of the fruit of Exportadora Bananera Noboa S.A. The indicated costs are not an invention of Exportadora Bananera Noboa S.A. They are certified by an official of the United States Department of Agriculture and were determined valid in the case of the tax determination presented against flower exporters, but not for Exportadora Bananera Noba S.A. It is necessary that the Director General of the Internal Revenue Service explain why the Tax Administration applied the data from the United States Department of Agriculture for exportations to EUROPE and ASIA when it is known that the costs are completely different given the geographic distance. We know why: because they didn't have referential data and given that, by all means, they had to establish an amount, they based it on the same data used for the United States market.

Everything stated here was sustained by Exportadora Bananera Noboa S.A. in the respective administrative claim and was not considered by the Tax Administration, despite the fact that, technically and judicially, the serious mistakes committed by the Internal Revenue Service in the Tax Determination of 2005 were demonstrated.

DR. FERNANDO ALARCÓN SAENZ
ATTORNEY AT LAW
EXPORTADORA BANANERA NOBOA S.A.