Economic impact of the transition from RISE to RIMPE on microenterprises in the province of Cotopaxi

Abstract

In the context of economics and public administration, fiscal policies play an essential role in shaping business environments. The transition of the province of Cotopaxi from the Ecuadorian Simplified Tax Regime (RISE) to the Tax Regime for Popular Entrepreneurs and Businesses (RIMPE) is a matter of great importance in this research, as well as for government authorities and the community at large. This study focuses on a detailed analysis of the economic impact of this change on microenterprises in the province, considering its scientific importance, social implications, and effects on the local business community. The analysis of tax policies and their influence on the economy is a continuously debated topic. The research focuses on understanding how changes in tax systems can have significant effects on the economic dynamics of a region and how these measures affect the microenterprise level in order to formulate more effective policies. Microenterprises are essential in many communities, generating employment and promoting economic development. The transition from RISE to RIMPE is not only about an economic assessment, but also about how tax decisions affect people's lives and job opportunities. The main objective of the research is to understand the economic effects of this transition on microenterprises in Cotopaxi, considering profitability, investment, job creation and competitiveness. Process challenges are addressed and long-term projections are presented to provide solid information to stakeholders and support data-driven decision-making. Previous research that has analyzed the changes in the RIMPE is mentioned and the need to provide training to taxpayers to avoid confusion in the new regime is highlighted. It shows how RIMPE benefits micro-enterprises compared to RISE and highlights mixed opinions on its impact on business. In the theoretical review, reforms in value-added and consumption taxes are discussed, as well as activities excluded from the regime. The duration of the RIMPE and the progressivity of the tax burden in the future are mentioned. The research method is descriptive and justified by the need to gain a full understanding of the effects of transition. The selection of the sample, composed of 7 microenterprises from Cotopaxi, is explained, and the limitations due to resources and access are recognized. In the results and discussion, the changes in the ranking of companies before and after the transition are presented. It analyzes how some companies improved their position, indicating benefits in competitiveness, while others remained stable. The importance of adaptation and business strategy is highlighted. In conclusion, the study shows that the transition from RISE to RIMPE has a differentiated impact on microenterprises in Cotopaxi. Some companies experienced improvements in competitiveness and position, while others maintained their stability. Adaptation and business strategy are essential to face these changes.

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