Impact of deductibility of personal expenses on tax collection

Abstract

The impact generated by the deductibility of personal expenses in tax collection is significant, as it tends to vary. Through the deductibility of personal expenses, taxpayers deduct expenses such as health, housing, education, with an eloquent deduction in the areas of food and health. Leading the country to an unstable collection and generating a high tax expense that does not allow Ecuador to exit the fiscal deficit. In this context, the tax policy plays a very important role since it is in charge of determining the direct and indirect tax burden in order to finance the activity of the State, considering this as a primary factor to pay for state expenses, including social spending.