Ecuador hikes taxes as deadly quake compounds economic pain

QUITO, Ecuador — President Rafael Correa announced Wednesday night that he is raising sales taxes and will charge a one-time levy on millionaires to rebuild cities devastated by Ecuador’s worst earthquake in decades.

In a televised address, Correa said damages from the 7.8-magnitude quake will probably run into the billions of dollars, adding to already heavy economic hardships in this OPEC nation triggered by the collapse in world oil prices.

The task of rebuilding shouldn’t fall only to communities along the coast in the quake’s path but will require sacrifices from all segments of Ecuadorean society according to their ability to contribute, Correa said.

Using authority granted by the state of emergency he declared after Saturday night’s quake, Correa said sales taxes would increase to 14 percent from 12 percent for the coming year.

People with more than $1 million in assets will be charged a one-time tax of 0.9 percent on their wealth, while workers earning over $1,000 a month will be forced to contribute a day’s wages and those earning $5,000 a month the equivalent of five days’ pay.