Tax fraud and the proportionality of penalties in Ecuador

Abstract

The imposition of “tax closure” made by the Servicio de Rentas Internas through the so-called tax notaries to taxpayer’s subject to its powers, causes immediate effect, since it directly affects in the economic sphere of the taxpayer; and, such fact may fall within the scope of criminal law if the order is disobeying. While these types of sanctions cause a great impact on society, no less true is that a timely and agile solution is required and that focuses on restitution, compensation and a comprehensive repair to the Tax Administration that is affected, without having to arrive to penalties such as imprisonment, or failing that sanctions are proportional to the presumed crime that is committed. The sanctions imposed in cases of tax fraud when it becomes evident than a tax payer administratively sanctioned has resumed its economic activities in a closed establishment, violate the principle non bis in idem and affect the wealth of taxpayers as explained in detail later.