Yesterday, instead of making a Presumptive Assessment as the law indicates, the Industrial Molinera was closed down for ten days.

The law is clear: when the authorities consider that they have not received sufficient information, the Internal Revenue Service must proceed with a presumptive gloss which they have not done. Instead, they closed Industrial Molinera C.A. down for ten days and by doing so the authorities have left hundreds of workers without being able to carry out their work, the entire country without flour to make bread, and have affected our buyers, suppliers and all Ecuadorians.

We already delivered information and it will never be sufficient. With this excuse, we will be closed down each time they want to attack us politically.

We protest against the harm they are doing to us and the damage done to Ecuadorians by driving up the price of flour and thereby the price of bread by preventing us from delivering flour daily to Ecuador as we have been doing for 47 years.

On November 16th, 2007, the tax administration began a Tax Assessment process for the entity I represent for the fiscal period corresponding to the year 2005, as with fiscal periods 2001 and 2004.

It is understood that the primary and essential objective of such a process – a requisite for the national treasury – is to establish a tax base subject to taxation, in this case, income tax payment; that is, tax payment on effective profitability derived from economic activity.

According to the fiscal guidelines in force during said fiscal period, 2005, and including the guideline written and approved in the so-called “Law for Tax Equitability”, it is established that when the taxpayer does not deliver information to the taxation administration or if that information is not satisfactory, the Internal Revenue Service must apply a Presumptive Tax Assessment as set forth in Article 23 of the Internal Tax Law.

For assessment processes applied previously to this same company, the
Tax Administration at no time proceeded to close us down. Instead, the Internal Revenue Service proceeded, based on their own information, to assess a tax base and consequently a tax to be paid.

What the Treasury should do, is proceed with the “Presumptive Assessment” process in the terms established by the fiscal guideline and which, over the years, has been promoted, upheld and defended by the same administration, and not the 10-day closure they have carried out.

Sincerely,

Gustavo Negrete Ugalde
General Manager