Ecuador Tax Agency Closes Microsoft Branch Offices

An anonymous reader writes "The Ecuador Tax Agency (SRI) has closed Microsoft branch offices for seven days. 'We have twice requested balances, payment reports and complete tax information, but the company hasn't given it to us, so in accordance with our laws we have proceeded with the closure,' the SRI official in charge of the proceeding said. Microsoft said it was a human mistake."

Comments

Actually this is very significant

[einhverfr]

Many Latin American countries have been struggling with corruption for a long time, Ecuador included. Ecuador in particular has been severely destabilized by such corruption (8 presidents in 10 years-- everything from coups to phony impeachments). Correa vowed to change that, and he has been doing a great job of it so far.

If Microsoft is not cooperating with tax audits, this could be due to an issue of management in their branch officies, but it could also be due to a human error. What is significant is that this happened at all. 10 years ago, it would have been unthinkable even if they weren't paying taxes at all. 20 years ago, it would have been avoided for fear of covert retribution from the US (as we saw in Guatamala, and arguably Ecuador as well).

This is significant because it means that Correa is serious about his willingness to stand up to powerful foreign corporations. Its significance is not limited to Microsoft-- this is more significant as to how it affects things like oil exports, foreign-owned banana plantations, and the like.

The rule of law is being asserted strongly in Ecuador which is a good thing.

Correa is no Chavez

[einhverfr]

Despite the rhetoric which the media seems to get almost completely wrong, I don't think that Rafael Correa is anything like Hugo Chavez. Correa is a rule-of-law capitalist who wants to see Ecuador develop along the lines of the United States. Of course this means that corporations must be forced to obey the laws evenly, which he has pledged to do. He has also pledged to get the Constitution rewritten to help reduce the level of corruption (restricting who can run on the basis that you must live in the district you want to represent), and a few other structural changes which are not aimed at disolving checks and balances but actually adding them. Independence from US interests and policy is a key element to his approach so he wants to close the USAF base in Manta, and has entered into an alliance of convenience with Chavez.

My own feeling is that Correa has acted responsibly regarding the attempts to rewrite the Constitution by tackling it immediately so that the question of term limits is less likely to be addressed as a way of keeping him in power.

CUrrently everything Correa has accomplished has been through sheer power of personality. He has been able to get previously opposing parties to back him and has, time and time again, routed opposition by building political alliances which would have seemed impossible before.

Correa, unlike Chavez is not a part of a massive political party. In fact, he doesn't have anyone from his party in Congress. Correa wants Ecuador, not Venezuela or Brazil, to be the new center of South America. Appearances aside, I think he is actually Chavez's worst enemy.

Correa earned his Masters in Economics in Belguim, and his PHD at the University of Illinois. He is a former university professor at USFQ (Universidad de San Francisco de Quito). He is hardly Anti-American. though he does dispise the Bush Administration (but so do I....). He is, however, unlikely to be a puppet to any other government.