Corporations and their impact on income tax revenue in the canton of san miguel de los bancos

Abstract

Corporate Income Tax collection is a fundamental pillar for sustaining public finances in Ecuador. However, in semi-rural cantons, this fiscal contribution is often diminished by informality and the regulatory complexity faced by local businesses.To evaluate the impact of corporations on Income Tax collection in the canton of San Miguel de los Bancos, identifying their level of compliance and the factors that limit their contribution to the national treasury. The research adopted a mixed-methods approach, with a non-experimental, cross-sectional design. The scope was descriptive and correlational. Data was collected using documentary sources (Internal Revenue Service databases) and primary sources through a structured survey applied to legal representatives and accountants of the local business network.There was an upward trend in corporate participation, reaching 42.50% of the cantonal tax collection. Nevertheless, 40% of taxpayers point to regulatory complexity and constant reforms as the main operational barrier, followed by a lack of tax culture and training (26.67%), which frequently leads to scenarios of involuntary tax avoidance.The tax collection potential of corporations in San Miguel de los Bancos is not fully exploited due to administrative frictions. It is essential for tax management and control institutions to transition towards a preventive model, simplifying procedures and promoting tax education to broaden the taxpayer base and foster local economic development.