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.